Indonesian sovereign wealth fund Danantara is selling up to 50 trillion rupiah (US$3.06 billion) of “patriot bonds” with a coupon yield of 2%, and several local tycoons have agreed to buy the debt, according to a report in Singapore’s The Straits Times newspaper.
Citing sources with direct knowledge of the matter, the report published on August 27 says the bond maturity was reduced to five- and seven-year tranches from more than 20 years originally.
It notes that the yield is lower than the benchmark five-year and seven-year sovereign bonds, which are currently at 5.9% and 6.16%, respectively.
“The bond yield is at a friendly rate (to the issuer). It wouldn’t have been called patriot bonds if it weren’t so,” according to one source quoted in the report.
The participating tycoons were not named.
Spokespersons for Danantara did not immediately respond to questions from Asia Asset Management.
