JAKARTA (TheInsiderStories) - The Indonesia government raised Rp6.1 trillion in an auction of sharia bonds or sukuk on Tuesday (Mar 7), which was oversubscribed twofold, better than expected before.
Data from Directorate General of Budget Financing and Risk Management shows the latest sale of Sharia bond attracted Rp12.35 trillion worth of bids from investors while similar issuance at the end of last month only attracted Rp10.38 trillion bids.
The government offered five series of Sharia bonds with maturities ranging between 2017 to 2031. The new series of Sharia bond SPN-S 08092017 with short term tenor and discount coupon becomes the most attracted Sharia bond for investors with Rp5.15 trillion incoming bids, while the government only covers Rp2 trillion or bid-to-cover ratio at 2.57.
The Sharia bond with middle term tenor was less attracted than short and long tenor. The longest tenor Sharia bond, PBS 012 with 15 years and 8.28 percent yield attracted Rp1.25 trillion while the government just raised Rp410 billion or bid-to-cover ratio at 3.06.
Those Sharia bond uses Ijarah principle and will be used to finance the State Budget deficit in 2017 which is targeted at 2.41 percent of GDP or equal Rp300 trillion. (*)