Friday, June 08, 2012

INDONESIA - CAPITAL MARKETS - Sukuk Sale in Works For End of the Year

www.thejakartaglobe.com - Indonesia will sell dollar-denominated sukuk toward the end of the year, according to Dahlan Siamat, a director of Islamic financing at the debt management office, provided it gets approval from the finance minister.

Dahlan declined to disclose the size of the offer, saying on Monday that “we have figures for the amount in the report we sent to the finance minister, but he will be the one to decide.”

He did not return calls from the Jakarta Globe seeking comment on the Islamic debt sale. Finance Minister Agus Martowardojo was not available for comment.  (source)


If the sale of the Islamic bonds goes forward, it would be the third Islamic dollar-denominated sale by Southeast Asia’s largest economy.

Indonesia has been selling conventional and Islamic bonds in the past year to help plug its budget deficit. The country’s budget shortfall is forecast to reach 2.23 percent of the gross domestic product this year, according to a revised 2012 state budget.

Indonesia last sold global Shariah-compliant debt on Nov. 14 of last year. The $1 billion of debt due in November 2018 was auctioned at a yield of 4 percent, compared with the 8.8 percent yield on Indonesia’s debut sale of five-year Islamic dollar bonds in 2009.

The yield on the 4 percent notes due November 2018 increased four basis points, or 0.04 percentage point, to 4.17 percent on Monday, data compiled by Bloomberg show.

Indonesia raised $650 million from its first-ever international sale of Islamic dollar bonds in April 2009. Islamic bonds, known as sukuk, comply with Shariah law by using asset returns to pay investors instead of offering interest.

Source:  http://www.thejakartaglobe.com/business/sukuk-sale-in-works-for-end-of-the-year/522222  - June 6, 2012

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