The Indonesian finance ministry has issued IDR6.87 trillion (US$549.6 million) in Sukuk on the 13th January 2015. The auction consisted of two reopening series and two new series, drawing in a total of IDR13.75 trillion (US$1.1 billion) incoming bids (a more than six-fold oversubscription) from the indicative target of IDR2 trillion (US$160 million). In an exclusive interview with IFN, Suminto, the director of Islamic financing, Directorate General of Debt Management, Ministry of Finance, reveals to NABILAH ANNUAR the details of this prominent deal.
Both the PBS and SPN-S Sukuk series employ the Ijarah structure whereby the underlying Ijarah asset to be leased for the PBS series are a pool of projects; while the underlying asset for the Ijarah sale and lease-back structure applied to the SPN-S series are state-owned assets. “We have [had] experience of using [the] Wakalah structure in issuing [our] global Sukuk in 2014. In the future, we consider to use this structure for the IDR Sukuk issuance in [the] domestic market,” said Suminto, thinking forward.
Utilized as a means of general budget financing, the Sukuk witnessed strong investor demand, resulting in the government upsizing the size to IDR6.87 trillion from an initial target of IDR2 trillion. According to Suminto the incoming bids originated from foreign banks (50%) as well as local banks (50%). Highlighting the unique features of the deal, he explained: “We formulated a new benchmarking strategy of (a) two-year Sukuk. As a start, we introduced a new tenor of 18 months. The instrument received good response from investors, indicated by IDR5.19 trillion (US$415.2 million) in incoming bids. We [further] increased the indicative target to IDR2 trillion (in 2014, the indicative target of each auction was only IDR1.5 trillion (US$120 million)).” As a result the government successfully had total incoming bids of IDR13.75 trillion, the highest it ever had since its Sukuk auction debut in 2009.
Indonesia Government Sukuk (PBS-006/PBS-007/PBS-008/SPN-S 14072015)
IDR6.8 trillion (US$532.43 million) (collectively)
13th January 2015
|Issuer||Perusahaan Penerbit SBSN Indonesia|
|Obligor||Government of Indonesia|
|Purpose of issuance||General financing and project financing|
|Trustee||Perusahaan Penerbit Indonesia|
|Tenor||Five years/25 years/1.5 years/ Six months|
|Payment||• Bullet payment (PBS-006/PBS-007/PBS-008)
• Discount (SPN-S 14072015)
|Maturity date||15th September 2020/ 15th September 2040/ 15th June 2016/14th July 2015|
|Governing law||Indonesian law|
|Listing||Indonesia Stock Exchange|
|Underlying assets||• Pool of projects (PBS-006/PBS-007/PBS-008)
• State-owned asset (SPN-S 14072015)
|Shariah advisors||National Shariah Board, Indonesia Ulema Council|
|Structure||• Ijarah asset to be leased (PBS-006/PBS-007/ PBS-008)
• Ijarah sale and leaseback (SPN-S 14072015)
|Face value/minimum investment||IDR1 billion (US$77,500.20)|