Indonesia's Danantara Issues US$1.5 Billion in Global Bonds

TEMPO.CO, Jakarta – Indonesia's Danantara Investment Management has successfully issued its inaugural international bond offering, raising US$1.5 billion through two bond tranches and attracting strong demand from global investors.

Danantara said the offering generated peak orders of US$4.6 billion, more than three times the amount issued.

"The interest was driven by high-quality institutional investors from the United States, Europe, the Middle East, Africa, and Asia," Danantara said in a statement on Friday, June 12.

The offering consisted of a US$750 million five-year bond with a yield of 5.35 percent and a US$750 million 10-year bond with a yield of 5.95 percent.

Danantara said the pricing reflected investor confidence in the institution and its close connection to the Indonesian sovereign.

"This reflects investor recognition of Danantara Investment Management's institutional strength and its link to the sovereign," the company said.

The five-year bond was priced at a spread of 32 basis points above Indonesia's secondary sovereign bond curve, while the 10-year tranche was priced at a spread of 34 basis points above the benchmark curve.

The spreads included a modest premium over Indonesia's sovereign fair value as well as a concession typically offered for a debut international issuance.

Investors from Europe, the Middle East, and Africa accounted for the largest share of buyers in the five-year bond, representing 41 percent of allocations, followed by the United States at 38 percent and Asia at 21 percent.

Asset and fund managers dominated demand for the five-year notes, accounting for 82 percent of allocations. Insurance and pension funds represented 10 percent, while banks accounted for 7 percent.

The final order book for the five-year tranche exceeded US$1.45 billion across 68 investor accounts.

For the 10-year bond, U.S.-based investors made up the largest share of buyers at 52 percent, followed by Europe, the Middle East, and Africa at 31 percent and Asia at 17 percent.

Asset and fund managers accounted for 72 percent of allocations in the 10-year tranche, while insurance and pension funds represented 25 percent.

The final order book for the 10-year bond surpassed US$1.35 billion from 63 investor accounts.

The successful debut marks an important milestone for Danantara as it seeks to establish a presence in international capital markets and broaden its investor base.

Read: Govt, DPR Agree to Raise 2027 State Revenue Target

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