December 13, 2017 / 12:57 PM / 2 years ago

Indonesia state-run firm sells debut "Komodo" bond in London

LONDON, Dec 13 (Reuters) - Indonesian state-run toll road operator Jasa Marga issued the country’s first London-listed, rupiah-denominated bond on Wednesday, with one government official saying other companies and the government itself could follow suit.

Jasa Marga raised four trillion rupiah ($295 million) via the issue which has been dubbed a “Komodo” bond after the Komodo dragon, a large species of lizard found only in Indonesia, and along the lines of Chinese yuan and Indian rupee “dimsum” and “masala” bonds listed overseas.

The bond, listed on the London Stock Exchange (LSE) and carrying a 7.5 percent coupon, was four times subscribed.

Rini Soemarno, Indonesia’s minister for state-owned enterprises, said Komodo bonds could be used for future infrastructure financing, given the size of the investor pool and absence of currency risk for the issuer.

“The investment need for transmission and power plants is quite significant so probably one of the next issuances will be from our electricity company,” Soemarno said, naming telecom, construction and mortgage banking as other sectors likely to tap the Komodo market.

“We want to make sure the Komodo bonds have a liquid market. New issuance is important... so that investors are comfortable there is a secondary market and different types of issuers,” she told reporters.

Asked if the Indonesian sovereign could also venture on to the Komodo market, she said:

“I think so. That is also the potential for the future.”

While Jasa Marga is the first Indonesian company to issue a rupiah bond in London, previous LSE-listed rupiah bonds were sold by banks such as the European Bank for Reconstruction and Development, HSBC and Barclays, with a total of around $2 billion now outstanding.

Dimsum bonds outstanding are worth $7.6 billion, the LSE said, while masala bonds total $6.7 billion. ($1 = 13,580.0000 rupiah) (Reporting by Sujata Rao; Editing by Susan Fenton)

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