Indonesian fund to raise another 12.6 trillion rupiah from patriot bonds

[JAKARTA] Indonesian sovereign wealth fund Danantara is raising an additional 12.6 trillion rupiah (S$991 million) through a debt offering to the nation’s wealthiest businesses and families, bringing the total raised from its “patriot bond” programme to more than US$3.7 billion.

The new follow-on issuance by Danantara Investment Management, the fund’s investment arm, makes use of an oversubscription option from its September sale, which raised 50 trillion rupiah at below-market yields. The second-phase offering carries the same 2 per cent coupon, with most of the notes maturing in five years and the remainder in seven years, according to a filing this week with the local securities depository.

Djamal Attamimi, Danantara’s managing director of finance, told Bloomberg News on Tuesday (Nov 25) that the additional issuance follows strong demand for the bonds. He said that the offering amounts to a private placement and that “participation is entirely voluntary.”

Danantara has not specified how it will use the additional proceeds. Sources familiar with the initial sale said funds from the first issuance were earmarked for waste-to-energy projects in South-east Asia’s largest economy.

The September sale marked Danantara’s first major external fundraising as the sovereign wealth fund, established earlier this year, ramps up plans to invest both domestically and overseas.

Danantara has so far collected an estimated US$7 billion in dividends from state companies it manages. The fund also recently secured a multi-currency syndicated credit facility equivalent to US$1 billion, months after approaching lenders for as much as US$10 billion. BLOOMBERG