The Indonesian government in June 2021 issued a landmark Sukuk issuance worth a total of US$3 billion, featuring a green Sukuk tranche that is touted as the first-ever 30-year and longest-tenored green Sukuk issuance globally. NESSREEN TAMANO writes.
The global Islamic trust certificates were issued in three tranches: a five-year US$1.25 billion facility; a 10-year paper worth US$1 billion; and a 30-year green Sukuk facility worth US$750 million.
The landmark green Sukuk tranche is the government’s fourth global green Sukuk issuance under its Green Bond and Sukuk Framework since the debut paper in 2018, but is the first with a 30-year tenor — globally the longest tenor for an issuance of its kind.
“The global Sukuk issuance is aligned with the Republic of Indonesia’s strategy to strengthen its position as a leader in the global Islamic financial markets, with the green Sukuk being a testimony of its dedication and long-term commitment to green and sustainable financing,” CIMB Bank, the lead arranger and bookrunner of the transaction, said.
The offering garnered robust demand, receiving a final orderbook of US$10.3 billion, reflecting an oversubscription of 3.43 times that resulted in the final pricing going below the fair value across all three tranches.
According to CIMB Bank, the issuance also achieved the lowest-ever five-year, 10-year and 30-year yield spread over the US Treasury and profit rate achieved by the Indonesian government for an international Sukuk paper.
9th June 2021
|Issuer||Perusahaan Penerbit SBSN Indonesia III|
|Obligor||Republic of Indonesia|
|Issue size||Tranche 1: US$1.25 billion|
Tranche 2: US$1 billion
Tranche 3: US$750 million
|Structure||Tranche 1 and 2: Sukuk Wakalah|
Tranche 3: Green Sukuk Wakalah
|Maturity date||Tranche 1: 9th June 2026|
Tranche 2: 9th June 2031
Tranche 3: 9th June 2051
|Yield/periodic distribution rate||Tranche 1: 1.5% pa|
Tranche 2: 2.55% pa
Tranche 3: 3.55% pa
|Listing||Singapore Exchange; NASDAQ Dubai|
|Governing law||English law; Indonesian law for asset-related documents|
|Joint lead managers and bookrunners||CIMB Bank; Citibank; Dubai Islamic Bank; HSBC; Standard Chartered|
|Joint green structuring advisors||HSBC; Standard Chartered|
|Co-managers||BRI Danareksa Sekuritas; Trimegah Sekuritas Indonesia|