Bali Mandar Toll Road - Photo by Waskita Karya

JAKARTA (TheInsiderStories) – Indonesian toll-road operator PT Jasa Marga Tbk (IDX:JSMR) has mandated banks for the issuance of its first offshore rupiah bonds, dubbed as Komodo bonds. The value of the Komodo bonds is yet to be determined.

The toll road operator needs about Rp7 trillion ($526 million) for the funding of its development projects in 2017. These funds need to be collected through a combination of bank loans, bonds, and asset securitization.

In the past, Indonesian companies have mostly issued global bonds in US dollar or other currencies. However, then struggle to service their debts after rupiah shriveled against the greenback.

The global Rupiah-denominated bonds would open up a new pool of investors for Jasa Marga, analysts have said. The global interest on the Komodo bonds, however, remains to be seen.

Jasa Marga has been rumored to be pursuing an offshore rupiah bond (its first ever) since earlier this year. While market watchers have questioned the realistic success of a so-called Komodo bond market, others say the rupiah will find buyers in the region.

President Joko Widodo is understood to have suggested the Komodo name instead, coming from the country’s native lizard — the Komodo dragon.

Jasa Marga is now set to become the first to test the market. HSBC and Mandiri Securities are leading the debut as joint global co-ordinators. Deutsche Bank and Standard Chartered Bank are the joint bookrunners.

Fixed income investor meetings will be held in Asia, London and in the US, beginning on Thursday (23/11).

State construction company PT Wijaya Karya Tbk (IDX:WIKA) has also been reported to be eyeing a Komodo bond issue. However, the company is yet to set any timetable for the Komodo bonds issue.

Aloysius Ro, Deputy of Restructuring & Business Development at Indonesia Ministry of the State-Owned Enterprises, previously said the Rupiah Bond global offering is expected to increase global investor participation in supporting national development. It is expected to provide access and diversification of Rupiah-based funding sources for companies in Indonesia engaged in various sectors – in particular for infrastructure.

“This is an alternative source of funds to support infrastructure development,” Aloysius told TheInsiderStories recently.

Written by Yosi Winosa, email: yosi.winosa@theinsiderstories.com

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