FIRST GLOBAL SUKUK A BIG HIT
Indonesia’s first sale of dollar-denominated sukuk was seven times oversubscribed, with orders received totaling US$4.7 billion. The demand recorded was around seven times higher than the $650 million of Islamic bonds offered by the government, according to a Finance Ministry statement.
Investors’ appetite to buy the dollar-denominated global sukuk was so high, be it sharia investors or conventional investors. The five-year sukuk bonds maturing on April 23, 2014, have a 8.8 percent yield, or 7.04 percent more than US Treasuries with similar maturity. The yield will be paid every six months, on April 23 and Oct. 23. In February, the government sold $2 billion of regular 10-year bonds overseas, with a yield of 11.75 percent, or 8.76 percent more than US debts.
The issuance is the largest straight issuance of dollar-denominated sukuk, outside of the Gulf Cooperation Council (GCC). And it is the first benchmark of dollar-denominated sukuk in Asia since 2007.
The global sukuk were ordered by Asian investors (32 percent), Middle East investors (30 percent), US investors (19 percent), European investors (11 percent) and Indonesian investors (8 percent). The orders came from fund managers (45 percent), banks (37 percent), retail investors (14 percent) and insurance and pension fund companies (4 percent).
