Pioneering Komodo Bond Market Opens in London
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Tue, 12 Dec. 2017
London Stock Exchange Group
On 12 December 2017, London Stock Exchange welcomed the listing of the world’s first Indonesian offshore rupiah-denominated bond – a Komodo bond – issued by an Indonesian State Owned Enterprise to its new international Securities Market. The landmark bond issuance from Jasa Marga, state-owned Indonesian toll road operator, was close to four times oversubscribed. The listing paves the way, through London, for the opening of the global Komodo bond market to support Indonesian company and infrastructure financing.
The proceeds of the bond will be used by Jasa Marga to access global investors, through London, to support the development of the country’s infrastructure plans and accelerate national economic growth. This is another example of London financing global growth.
Rini M. Soemarno, Ministry of State Owned Enterprises, Republic of Indonesia:
“Investors can benefit from accessing investment opportunities in Indonesian infrastructure. Our landmark Komodo bond enables foreign investors to access high-quality infrastructure to diversify their portfolios. Investors also gain access to the local currency, enabling them to gain a higher return compared to USD Bonds. IDR Bonds will effectively be Rupiah denominated funds, a proactive approach to risk management in relation to foreign currency.
“The issuance of global bonds in local currency Indonesian Rupiah will diversify the investor base of public companies wishing to target investors seeking “local currency assets” and create new funding sources. With the issuance of global IDR Bonds, or Komodo Bonds, companies have the flexibility to opt for the best funding alternatives amidst the immense funding needs for investment.”
Desi Arryani, CEO, Jasa Marga:
“We are very pleased to see a broad range of global investor participation on this landmark, debut Komodo bond. This transaction is not only a significant milestone for Jasa Marga but also a significant step forward in paving the way for other Indonesian borrowers to access this new avenue of financing.
“Given the strong credit story and the stable nature of revenues, Jasa Marga was able to obtain early investor interest ahead of the transaction announcement. The issuance, through London Stock Exchange, the world’s most international stock exchange, allowed Jasa Marga to further diversify its funding sources, having tapped the local markets through securitisation and project bond issuances earlier this year, which were also firsts in the local capital markets. This transaction by Jasa Marga sets a new milestone for Indonesia’s capital markets and represents the opening of a new asset class in the global markets, as a whole.”
Rt Hon Mark Field MP, Minister of State, Foreign and Commonwealth Office:
“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.”
Nikhil Rathi, CEO, London Stock Exchange Plc:
“Today is a milestone for Indonesia, one of the fastest growing economies in the G20, and London Stock Exchange is proud to be the partner of choice for this landmark event. As a world first, the successful issuance of Jasa Marga’s Komodo bond on our new International Securities Market highlights London Stock Exchange’s ability to support Indonesian issuers attract significant global capital without foreign exchange currency risk.
“We are committed to establishing London as the global centre for Indonesian offshore rupiah-denominated capital raising. Through our International Securities Market, issuers benefit from an efficient listing process and access to the deepest pool of internationally oriented capital in the world. We look forward to building this market with Indonesian partners and authorities and supporting the internationalisation of Indonesia’s capital markets.”
To find out more about London Stock Exchange’s Komodo bond offering, visit www.lseg.com/komodo.