Indonesia Successfully Issues US$ 2 Billion Global Sukuk with Strong Demand

Overview of the Issuance

The Indonesian government, through the Ministry of Finance, has successfully completed the issuance of US$ 2 billion in Global Sukuk. This issuance is part of the government's strategy to access international capital markets and diversify its funding sources. The Sukuk was divided into two tranches: US$ 1.1 billion with a 5-year tenor maturing in 2030, and US$ 900 million with a 10-year tenor maturing in 2035.

Investor Response and Yield

The issuance saw an exceptionally strong response from investors, with peak orders reaching US$ 5.8 billion, or 2.9 times the amount issued. After the Final Pricing Guidance, the orders remained robust at over US$ 3.9 billion. The yields were set at 4.5% for the 5-year Sukuk and 5% for the 10-year Sukuk. According to Suminto, Director General of Financing and Risk Management at the Ministry of Finance, this strong demand reflects investor confidence in Indonesia's economic prospects and government credibility.

Market Reception and Credit Ratings

The Sukuk Global issuance is the seventh such transaction by the Indonesian government in 2025, demonstrating continued investor appetite for Indonesian debt. The bonds will be settled on December 1, 2025, and will be listed on the Singapore Exchange and NASDAQ Dubai. The issue has been rated Baa2 by Moody's, BBB by S&P Global Ratings, and BBB by Fitch Ratings. Major international banks, including Dubai Islamic Bank, Goldman Sachs, J.P. Morgan, KFH Capital, and Standard Chartered Bank, acted as Joint Lead Managers and Bookrunners for the transaction.

Significance of the Issuance

This successful issuance underscores Indonesia's ability to tap international markets effectively, even in a challenging global environment. The strong demand indicates investor confidence in the country's economic management and growth prospects. The transaction also highlights the government's commitment to diversifying its investor base and funding sources through innovative financial instruments like Sukuk.