NAZAHA ONLINE: Islamic Finance Blog

Interesting news concerning the sukuk (Bonds) issuance from Indonesia. Here is the article below:

Indonesia has yet to decide on the final size of its rupiah Islamic bonds, or sukuk, but it may be higher than an initial target of 5 trillion rupiah ($546.6 million), a finance ministry official said.

The ministry is in the process of selling 7-year and 10-year sukuk, the government’s first sukuk issuance, as part of efforts to finance the state budget deficit and diversify debt instruments in the domestic financial market.”

Obviously, nothing has been finalized, and some details still need to be finalized, such as 

‘The size has not yet been set. Some investors are asking for higher coupon rates,’ said Dahlan Siamat, the finance ministry’s senior official in charge of sharia financing, told Reuters late on Thursday.

When asked whether the size would be higher than the finance ministry’s initial target of 5 trillion rupiah, Siamat said: ‘Yes. It looks like that.’

‘Let’s wait until Aug. 26 on the settlement date. The finance minister herself will announce the details,’ Siamat said, referring to Finance Minister Sri Mulyani Indrawati.

He declined to give details, but the government has said yields on the sukuk would refer to yields in the secondary market for conventionalgovernment bonds of similar maturities.

As for the timetable for this government issued Islamic bonds (Sukuk), it seems nothing will change, and there is no delay, as highlighted below:

Indonesia has said it also plans to sell dollar-denominated sukuk in November. The government will start a roadshow for the paper in the fourth week of October.

Sukuk bonds comply with Sharia, or Islamic law, which bans charging interest. Investors are instead paid income derived from assets such as rent from property or commercial transactions such as trade in goods and services.

Source: Forbes

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