Key facts
- Danantara Investment Management, a unit of Indonesia's sovereign wealth fund, raised $1.5 billion in its debut dollar bond sale.
- The sale consisted of $750 million in five-year notes and $750 million in 10-year notes.
- The five-year bonds were priced to yield 5.35%, and the 10-year bonds at 5.95%.
- The deal attracted over $4.6 billion in orders, allowing for a reduction in yields.
- Bank Indonesia recently increased its benchmark interest rate by 25 basis points to 5.50%.
A unit of Indonesia's sovereign wealth fund, Danantara Investment Management, successfully raised $1.5 billion in its first-ever U.S. dollar bond offering. The sale, split equally between $750 million in five-year and $750 million in 10-year notes, was met with strong demand, exceeding $4.6 billion in orders.
This robust demand allowed Danantara to lower the final yields by 35 basis points from initial guidance, pricing the five-year notes at 5.35% and the 10-year notes at 5.95%. The issuance serves as a test of foreign investor confidence in Indonesian assets, particularly amid concerns about the rupiah's recent depreciation and President Prabowo Subianto's populist economic policies.
In a move to stabilize the rupiah, Bank Indonesia recently implemented a rare off-cycle increase of its benchmark interest rate by 25 basis points, bringing it to 5.50%. Danantara Investment Management, launched by President Prabowo in February 2025, plans to use the proceeds for general corporate purposes, including investments and debt refinancing. The notes are expected to be issued on June 18 under a $5 billion global medium-term note program. Citigroup, DBS, HSBC, Mandiri Securities, and Standard Chartered acted as joint bookrunners and lead managers for the transaction.