The Indonesian government opened its first retail cash Waqf-linked Sukuk (CWLS) series SWR001 on the 9th October 2020, raising IDR14.91 billion (US$979,799) in funds. The two-year offering based on the Wakalah structure with a fixed rate of 5.5% per annum and monthly coupon payments closed on the 12th November 2020.
The inaugural retail issuance followed the Indonesian government’s landmark private placement cash Waqf-linked Sukuk offering issued in March 2020. The underlying assets for the retail Sukuk include state-owned assets and projects and activities under the 2020 National Budget.
According to a statement from the Indonesian Directorate General of Budget Financing and Risk Management, the issuance was part of the government’s efforts to support the national Waqf initiative and assist the development of social investment and productive Waqf in the country.
The retail CWLS series is expected to create inclusive and sustainable economic growth through poverty eradication and inequality reduction and contribute to increasing productivity. The auction was conducted offline with Mandiri Syariah Bank, Bank BRISyariah, Bank Muamalat and BNI Syariah Bank acting as government-appointed distribution partners.
Bank Indonesia noted in the first annual Cash Waqf-Linked Sukuk report that the success of the SWR001 issuance was curtailed by the COVID-19 pandemic as well as low public literacy. The central bank maintained that the potential for retail cash Waqf is considerable. As such, the government has committed to increasing literacy and making the offering more affordable.
The government has since closed the third issuance under its retail CWLS series on the 7th July 2022, which was its largest orderbook, raising IDR38.25 billion (US$2.51 million) in funds. It issued the second issuance in June 2021. The inaugural retail issuance is set to mature on the 10th November this year.
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Indonesian Government SWR001 cash Waqf-linked Sukuk IDR14.91 billion (US$979,799)  12th November 2020 |
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| Summary of terms and conditions | |
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Issuer |
Indonesian government |
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Size of issue |
IDR14.91 billion (US$979,799) |
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Mode of issue |
Retail |
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Purpose |
Funding social projects |
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Tenor |
Two years |
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Profit rate |
5.5% per annum |
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Payment |
Monthly |
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Currency |
Indonesian rupiah |
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Maturity date |
10th November 2022 |
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Governing law |
Indonesian law |
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Islamic structure |
Wakalah |
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Minimum investment |
IDR1 million (US$65.71) |
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Underlying asset |
Government assets and projects |
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Investor breakdown |
Individual investors, institutional investors |