‘Higher return’ Komodo bond launches on London Stock Exchange

The world’s first ‘Komodo bond’ issued by an Indonesian state-owned enterprise was launched in London today, offering investors “access to the local currency, enabling them to gain a higher return compared to USD Bonds,” according to Rini Soemarno, Minister of State Owned Enterprises of Indonesia.

The Komodo bond – an Indonesian offshore rupiah-dominated bond – was issued on the London Stock Exchange this morning by Jasa Marga, an Indonesian toll road operator. The issuance aims to attract global investors to support infrastructure development in Indonesia – a top policy priority of President Joko Widodo.

The Komodo bond enables foreign investors to access high quality infrastructure to diversify their portfolios, and gain access to the local currency to gain a higher return, Minister Soemarno said.

The three year dated Komodo bond raised IDR 4 trillion (USD 295.7 million equivalent), with a coupon of 7.5% and secured global investor support, according to the London Stock Exchange Group, which has called the bond issuance “another example of London financing global growth.”

The launch is the latest in a long line of global first bond issuances by Asian issuers on the LSE.

Mark Field, Minister of State for the Foreign and Commonwealth Office, said: “The launch of the Komodo Bond is a huge success, and I hope it will be the first of many.  It is a clear demonstration of Britain’s global leadership in financial services, and the close partnership between Indonesia and the UK.”