Indonesia chose three banks on Tuesday to manage the sale of as much as $650 million in Islamic bonds in October after securing credit ratings upgrades from Standard & Poor’s and Moody’s in the past year as the economy recovered. Investors look at Indonesia favorably and there’s the prospect it will become an investment grade issuer.

S&P upgraded Indonesia’s credit rating to BB in March, two levels below investment grade, while Moody’s raised its ranking in September to Ba2, also two notches below. The yield on Indonesia’s dollar-denominated Islamic notes fell to a record low of 3.44 percent on Wednesday, compared with 8.37 percent at the time of issue, and returned 27 percent since the sale on April 17, 2009, according to RBS prices.

The HSBC/NASDAQ Dubai US Dollar Sukuk Index, made up of Islamic bonds from Indonesia to Saudi Arabia, gained 15 percent in the same period. Global sales of notes that comply with the religion’s ban on interest fell 24 percent to $6.6 billion so far this year. Indonesia hired HSBC Holdings, Standard Chartered and Citigroup to manage its second overseas offering of sukuk in October. The extra yield that investors demand to hold Dubai’s dollar sukuk rather than Malaysia’s has widened 30 basis points since May 28 to 409 today, according to data compiled by Bloomberg.