Indonesia's Danantara bond sale raises $1.5 billion, signaling strong investor confidence

Indonesia's sovereign wealth fund Danantara has successfully raised US$1.5 billion in its first international bond offering, a move officials say underscores strong investor confidence in the nation's economic prospects. The offering significantly surpassed its initial target of US$1 billion, attracting orders of around US$4.6 billion during the book-building process.

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Initially, we planned to raise US$1 billion, but orders reached approximately US$4.6 billion during the book-building process. Given the strong demand, we decided to increase the issuance size from US$1 billion to US$1.5 billion, split evenly between five-year and 10-year tenors.

Investment and downstream minister Rosan Roeslani, who also serves as Danantara's CEO, announced the increased issuance size, split evenly between five-year and 10-year bonds. He noted that the final pricing exceeded market expectations, particularly given recent market turbulence and concerns over the government's fiscal policies. "Many people predicted that nobody would want to buy the bonds, or that we would have to offer very high rates. Neither of those happened," Roeslani stated, emphasizing the credibility of both Danantara and the government.

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This also proves that investor confidence in Indonesia is high.

The success is attributed partly to extensive international roadshows where Danantara management met with approximately 122 investors across Hong Kong, Singapore, Boston, London, and New York. Investors from the United States represented the largest share of demand. State Secretariat Minister Prasetyo Hadi added that the government will continue to implement measures to bolster economic fundamentals and enhance Indonesia's investment climate.

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Many people predicted that nobody would want to buy the bonds, or that we would have to offer very high rates. Neither of those happened.