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Adira Finance’s Sukuk: Meeting financing demands

Adira Dinamika Multi Finance, an Indonesian consumer financing and leasing company that offers Islamic solutions, has issued two tranches of its Sustainable Sukuk Mudarabah IV Phase II 2021 worth IDR200 billion (US$13.88 million). NESSREEN TAMANO writes.

The Sukuk facility was issued alongside the company’s sustainable bonds worth IDR1.3 trillion (US$90.23 million), and collectively, the two issuances were oversubscribed 4.8 times.

The first tranche of the Islamic paper — Series A — held a nominal value of IDR134 billion (US$9.27 million) and a tenor of 370 days, while Series B was issued at IDR66 billion (US$4.56 million) with a three-year tenor.

Proceeds from both tranches will be used to expand Adira Finance’s consumer and Murabahah financing lines.

The company, which is a subsidiary of Bank Danamon Indonesia and a part of MUFG Group, is not new to issuing Sukuk; in July last year, it issued the first phase of the same sustainable Sukuk Mudarabah series, raising the same amount of IDR200 billion to support its financing activities as Indonesia started to reopen after its first lockdown at the onset of the coronavirus pandemic.

At the beginning of 2021, an increase in automotive sales in Indonesia resulted in Adira Finance recording growth in its financing activity as well. Almost all financing product segments experienced an increase, predominantly in new car financing, totaling a 17.3% year-on-year increase at IDR11.8 trillion (US$818.98 million) at the end of the first quarter of 2021, the company said.

As at the end of March 2021, the company also recorded Murabahah financing receivables worth IDR2.29 trillion (US$158.34 million).

Adira Finance’s Sukuk
IDR200 billion (US$13.88 million)

23rd July 2021
IssuerAdira Dinamika Multi Finance
TrusteeBank Negara Indonesia
TranchesSeries A: IDR134 billion (US$9.27 million)
Series B: IDR66 billion (US$4.56 million)
Profit rateSeries A: 4.25%
Series B: 5.5%
TenorSeries A: 370 days
Series B: 36 months (three years)
GuarantorsIndo Premier Sekuritas; DBS Vickers Sekuritas Indonesia; Mandiri Sekuritas; Trimegah Sekuritas Indonesia
Legal advisorThamrin & Rachman Law Firm
Rating‘idAAA(sy)’ by Pemeringkat Efek Indonesia (PEFINDO)

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