Indonesia has successfully completed its first-ever yuan-denominated panda bond issuance, raising $1.03 billion (7 billion yuan) from the Chinese domestic bond market. According to a finance ministry official, the nation made a spectacular debut in the international debt market by attracting overwhelming investor interest. The bond settlement is scheduled for July 30, showcasing Indonesia's strong financial appeal and successful entry into China's domestic bond market.
Indonesia issued 5.6 billion yuan worth of three-year notes with a yield of 1.9% and 1.4 billion yuan of five-year notes with a yield of 2.19%, as reported by Suminto, the ministry's director general for financing. The total orders for the bonds reached 17 billion yuan with a bid-to-cover ratio of 2.4 times, indicating strong investor demand for the Southeast Asian nation's debut panda bond offering. This successful issuance demonstrates Indonesia's ability to access China's domestic bond market through yuan-denominated instruments.
The mandate sheet shows that Bank of China has been appointed as the lead underwriter and lead bookrunner for the issue, as reported by Reuters. The consortium includes CICC, CITIC Securities, DBS Bank China and ICBC as joint lead underwriters and joint bookrunners. The banking arrangement reflects the complexity and scale of the proposed panda bond issuance in China's interbank market, with the consortium successfully executing the transaction to completion.
Indonesia currently holds investment-grade sovereign credit ratings from major international agencies, according to the document reviewed by Reuters. The country is rated Baa2 by Moody's, BBB by S&P Global Ratings and BBB by Fitch Ratings. Additionally, Indonesia has received an AAA onshore rating from Chinese credit rating agency Lianhe, which was crucial for accessing China's domestic bond market through panda bonds and contributed to the successful investor response.
