JAKARTA (TheInsiderStories) – Indonesian state owned construction company, PT Wijaya Karya Tbk (IDX:WIKA), listed its Rp5.4 trillion (US$ 405 million equivalent) bond to help finance infrastructure development plans on London Stock Exchange Monday (30/1). It becomes the first Komodo bond by an Indonesian issuer on London Stock Exchange in 2018.
WIKA’s three-year Komodo bonds raised with a coupon of 7.7 per cent. The bonds attracted global investor support and were more than two and a half times oversubscribed. The proceeds will be used by WIKA to support the funding of significant investment and infrastructure projects across Indonesia.
The landmark bond issuance from WIKA comes less than two months after the first-ever Komodo bond listed on London Stock Exchange, by state-owned Indonesian toll road operator, Jasa Marga. WIKA’s Komodo bonds are the largest to date. Together WIKA and Jasa Marga are paving the way for the opening of the global Komodo bond market to support Indonesian’s infrastructure development.
Nikhil Rathi, CEO, London Stock Exchange Plc welcomes Sri Mulyani Indrawati, Minister of Finance Republic of Indonesia, Rini M. Soemarno, Minister of State Owned Enterprises, Republic of Indonesia Bintang Perbowo, President Director, Wijaya Karya and The Rt Hon Mark Field, Minister of State for Asia and the Pacific at the Foreign and Commonwealth Office, to open London trading.
Sri Mulyani Indrawati, Minister of Finance said the government has been striving to create a conducive ecosystem for infrastructure development. In order to create an inclusive growth, infrastructure development is a necessity, following last year S&P and Fitch rating ugrade.
“This certainly helps to lower borrowing cost and gives investor the confidence to invest in Indonesia,” she said.
Meanwhile, Rini M. Soemarno, Minister of State Owned Enterprises mentioned SOEs play a critical role in the infrastructure development of Indonesia. She added ”The Ministry will continue to support SOEs looking to tap the Komodo bond market as it is increasingly becoming a reliable source of funding to support Indonesia’s infrastructure development.”
WIKAs Komodo bond becomes the 19th active Indonesian rupiah-denominated bond listed on London Stock Exchange bringing the total amount outstanding to approximately US$2.7 billion.
Other issuers include supranationals and large investment banks including Inter-American Development Bank, European Bank for Reconstruction & Development, Barclays and HSBC that have raised over US$2 billion equivalent to finance operations in Indonesia.