Indonesian Corporates Accelerate Bond Issuance Amid Falling Interest Rates

Surge in Debt Issuance

As 2025 comes to a close, Indonesian companies are taking advantage of the current low-interest-rate environment to raise capital through bond and sukuk issuances. This trend is driven by the recent decline in reference interest rates, making borrowing cheaper and more attractive.

Major Issuances

• PT Bank Mandiri Tbk (BMRI): Plans to issue Sustainable Bonds I Bank Mandiri Phase I 2025 worth Rp 5 trillion. The proceeds will be allocated 60% towards financing or refinancing Environmentally Oriented Business Activities (KUBL) and Socially Oriented Business Activities (KUBS).
• PT Merdeka Battery Materials Tbk (MBMA): Successfully issued bonds and mudharabah sukuk totaling Rp 3.1 trillion, comprising Rp 2.10 trillion in bonds and Rp 1 trillion in sukuk. The funds will be used for repaying loan facilities and financing the activities of its subsidiaries, particularly PT Merdeka Tsinghan Indonesia (MTI).

Market Implications

The surge in corporate bond issuance reflects companies' strategic responses to the current macroeconomic environment. Lower interest rates have created favorable conditions for firms to secure long-term financing at reduced costs. This trend is expected to continue as long as monetary conditions remain accommodative.

Sectoral Participation

The bond issuance wave is not limited to a specific sector, indicating broad-based participation across various industries. Companies are leveraging this opportunity to strengthen their capital structures and fund strategic initiatives. As the year ends, more issuances are likely as companies look to optimize their funding strategies in the prevailing market conditions.