The FINANCIAL — London Stock Exchange on December 13 welcomes the listing of the world’s first Indonesian offshore rupiah-denominated bond – a Komodo bond – issued by an Indonesian State Owned Enterprise to its new International Securities Market.
The landmark bond issuance from Jasa Marga, state-owned Indonesian toll road operator, was close to four times over subscribed. The listing paves the way, through London, for the opening of the global Komodo bond market to support Indonesian company and infrastructure financing, according to London Stock Exchange.
The three year dated Komodo bond raised IDR 4 trillion (USD 295.7 million equivalent), with a coupon of 7.5% and secured global investor support. The proceeds of the bond will be used by Jasa Marga to access global investors, through London, to support the development of the country’s infrastructure plans and accelerate national economic growth. This is another example of London financing global growth.
Rini M. Soemarno, Ministry of State Owned Enterprises, Republic of Indonesia:
“Investors can benefit from accessing investment opportunities in Indonesian infrastructure. Our landmark Komodo bond enables foreign investors to access high quality infrastructure to diversify their portfolios. Investors also gain access to the local currency, enabling them to gain a higher return compared to USD Bonds. IDR Bonds will effectively be rupiah-denominated funds, a proactive approach to risk management in relation to foreign currency.
“The issuance of global bonds in local currency Indonesian Rupiah will diversify the investor base of public companies wishing to target investors seeking “local currency assets” and create new funding sources. With the issuance of global IDR Bonds, or Komodo Bonds, companies have the flexibility to opt for the best funding alternatives amidst the immense funding needs for investment.”
Desi Arryani, CEO, Jasa Marga:
“We are very pleased to see a broad range of global investor participation on this landmark, debut Komodo bond. This transaction is not only a significant milestone for Jasa Marga but also a significant step forward in paving the way for other Indonesian borrowers to access this new avenue of financing.
“Given the strong credit story and the stable nature of revenues, Jasa Marga was able to obtain early investor interest ahead of the transaction announcement. The issuance, through London Stock Exchange, the world’s most international stock exchange, allowed Jasa Marga to further diversify its funding sources, having tapped the local markets through securitisation and project bond issuances earlier this year, which were also firsts in the local capital markets. This transaction by Jasa Marga sets a new milestone for Indonesia’s capital markets and represents the opening of a new asset class in the global markets, as a whole.”
Rt Hon Mark Field MP, Minister of State, Foreign and Commonwealth Office:
“The launch of the Komodo Bond is a huge success, and I hope it will be the first of many. It is a clear demonstration of Britain’s global leadership in financial services, and the close partnership between Indonesia and the UK.”
Nikhil Rathi, CEO, London Stock Exchange Plc:
“Today is a milestone for Indonesia, one of the fastest growing economies in the G20, and London Stock Exchange is proud to be the partner of choice for this landmark event. As a world first, the successful issuance of Jasa Marga’s Komodo bond on our new International Securities Market highlights London Stock Exchange’s ability to support Indonesian issuers attract significant global capital without foreign exchange currency risk.
“We are committed to establishing London as the global centre for Indonesian offshore rupiah-denominated capital raising. Through our International Securities Market, issuers benefit from an efficient listing process and access to the deepest pool of internationally oriented capital in the world. We look forward to building this market with Indonesian partners and authorities and supporting the internationalisation of Indonesia’s capital markets.”
Jasa Marga’s bond listing is the latest in a long line of global first bond issuances by Asian issuers on London Stock Exchange. London Stock Exchange is now the largest international centre for Indian offshore rupee-denominated bonds, “Masala Bonds”.
September 2017 – IREDA lists first Masala bond on London Stock Exchange’s new International Securities Market
May 2017 – NTPC lists the first bond on London Stock Exchange’s new International Securities MarketSeptember 2016 – British Columbia issues world’s first Masala bond by a foreign government entity
August 2016 – NTPC lists world’s first Indian green Masala bond and first Masala bond by a quasi-sovereign issuer
July 2016 – HDFC lists world’s first Masala bond by an Indian corporate
June 2016 – first Chinese sovereign RMB bond issued outside of China
April 2016 – Hungary becomes first Sovereign from continental Europe to issue a RMB bondAugust 2015 – International Finance Corporation (IFC), a member of the World Bank Group, issues world’s first green Masala bond, raising $49 million equivalent
November 2014 – IFC lists first Masala bond, going on to issue a further three Masala bonds in London over two years
122 Dim Sum bonds with a combined outstanding amount of $7.6 equivalent billion and 44 Masala bonds have historically listed in total on London Stock Exchange, raising equivalent to approximately $7.66 billion
London’s expertise in helping raise capital in Indonesian rupiah
Jasa Marga’s Komodo bond becomes the 17th active Indonesian rupiah-denominated bond listed on London Stock Exchange bringing the total amount outstanding to approximately $2 billion
Other issuers include supranationals and large investment banks such as the Inter-American Development Bank, European Bank for Reconstruction & Development, Barclays and HSBC which have raised over $1.6 billion equivalent to finance operations in Indonesia