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Indonesia’s sovereign sukuk attracts $10 billion order book

The 10-year sukuk drew strong investor demand – order books were worth $10.2 billion – helping reduce the yield of sukuk which had originally started in the vicinity of 4.625 percent on Monday, before being trimmed to 4.35 percent.

Indonesia’s sukuk kickstarts what looks to be a busy month for sovereign issuance, with Luxembourg, Hong Kong and South Africa conducting investor meetings ahead of their respective transactions.

In June, Britain became the first Western country to sell sukuk, raising 200 million pounds from a five-year deal, attracting 2.3 billion pounds in orders.

Year-to-date, issuance of sukuk globally has reached $85.9 billion through 456 deals, compared to $74.9 billion through 558 deals in the same period last year, according to data from Zawya, a Thomson Reuters company.

Pakistan is also aiming to issue a sukuk worth as much as $1 billion later this year, but those plans have been delayed by political turmoil.

Indonesia’s sukuk, rated Baa3 by Moody’s, was sold to investors in the Middle East (35 percent), Asia (30 percent), Europe (15 percent) and the U.S. (20 percent), the finance minstry said.

CIMB, Emirates NBD Capital, HSBC and Standard Chartered acted as lead managers.-Reuters



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