Promoting Komodo Bonds on London Stock Exchange (Image credit : Special)

JAKARTA (TheInsiderStories) – The Indonesian government and several financial institutions have started to promote the Komodo Bond in Europe this week. Four state-owned Enterprises (SOEs) has set a plan to issue Rp7 trillion (US$518.52 million).

The roadshow was led by Minister of State-Owned Enterprises (SOEs) Rini Soemarno and supported by several top finance officials, including Kartika Wirjoatmodjo, the CEO of Indonesia’s biggest lender PT Bank Mandiri Tbk (IDX: BMRI).

Deputy for Minister of SOEs Gatot Trihargo explained that the purpose of the roadshow was to formally list the national bond on the London Stock Exchange (LSE).

“London provides access to the deepest pool of internationally-oriented capital in the world, and accounts for 70 per cent of the secondary market turnover in international bonds,” he told TheInsiderStories.

Komodo bonds, the name by which global Indonesian rupiah bonds are referred to, could help Indonesian SOEs and corporates to gain access to large-scale foreign investment while avoiding any foreign currency exchange risk.

These instruments were nicknamed ‘Komodo bonds’ by President Joko Widodo, on behalf of the Komodo Dragon, a giant lizard native to the Indonesian archipelago.

“With a stable fiscal policy and a recent uplift in its sovereign credit rating to ‘investment grade’, we expect Indonesia can successfully build an offshore bond market denominated in its local currency, achieving higher diversification of its global investor base,” he continued.

With 16 active Indonesian rupiah-denominated bonds, LSE is developing a leading position as the largest Komodo bond center.

Previously, on Nov. 30, Indonesian toll road operator PT Jasa Marga Tbk. (IDX:JSMR) successfully priced the first-ever global rupiah bond from an Indonesia-domiciled issuer, with a final issue size of Rp4 trillion.

The bonds are Senior Unsecured Fixed Rate Notes (the ‘Notes’) with a final maturity of 3 years. The Notes are rated Baa3 by Moody’s and BB+ by Standard & Poor’s.

The Notes were priced at par with a coupon/yield of 7.50 percent. The maturity date for the Notes is 11 December 2020.

Jasa Marga undertook a global roadshow covering Hong Kong, Singapore, London, New York and Boston, ahead of announcing the terms of the proposed debut Komodo bond offering.

Given its strong credit story and stable recurring revenues, Jasa Marga was able to attract early investor interest ahead of the transaction announcement. This resulted in the order-book growing consistently throughout the day, once the terms of the deal were announced, on the back of a wide range of high-quality investors.

With 16 active Indonesian rupiah-denominated bonds, LSE is developing a leading position as the largest Komodo bond center.

Written by Elisa Valenta, Email: elisa.valenta@theinsiderstories.com

 

 

 

 

 

 

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