On the late of January 2021, PT Indonesia Infrastructure Finance (“IIF” or the “Company”) has successfully tapped into the U.S. dollar bond markets with the issuance of USD150 million 5-year senior unsecured sustainability Regulation S bond (the “Notes”) after completing a listing process and extensive marketing consisting of a global investor call coupled with a series of small group investor calls. The Notes are rated BBB (stable) by Fitch, on par with the Republic of Indonesia.
As a debut issuer, IIF took advantage of an opportunistic window in the global debt capital markets and the transaction received positive response from global investors with a final order size of US$390 million or oversubscription of close to 2.6x above the IIF’s target of US$150 million issuance.
The Notes, due 27 January 2026, were priced at a coupon of 1.500% and at a yield of 1.750%, representing 37.5 bps tightening from initial price guidance of 2.125% area. Thus, remarked as the lowest-ever coupon and yield for a fixed rate 5-year offering by an Indonesian company.
IIF, an Indonesia’s leading infrastructure financing and advisory institution, provides a wide range of financing products and fee-based advisory services to infrastructure projects in Indonesia and to their sponsors. Founded in 2010, IIF was established at the initiative of Ministry of Finance the World Bank, the Asian Development Bank and other multilateral institutions as the key entity responsible to be a catalyst for the acceleration and improvement of private sector’s participation in investment into Indonesian sustainable infrastructure projects.
As of 30 September 2020, IIF has total investment assets of IDR10,651 billion. Supported by the strong capitalization from the shareholders (PT Sarana Multi Infrastruktur (Persero), International Finance Corporation, Asian Development Bank, Deutsche Investitions-und Entwicklungsgesellschaft and Sumitomo Mitsui Banking Corporation), as well as long-term subordinated loans from the World Bank and the Asian Development Bank, IIF has a very sound basis to provide solutions for financing infrastructure development in Indonesia.
IIF continues to show its commitment, leadership and contribution to sustainable financing by dedicating this Notes as sustainability bonds and to use the proceeds for the eligible green and/or social projects under its sustainability financing framework (the “Framework”). The Framework has been reviewed by Sustainalytics, who has also issued a second party opinion. This is the first-ever sustainability notes issued by an Indonesian non-banking financial institution, and highlights IIF’s prominent position and perseverance to strive in championing environmental, social, and governance (ESG) values in infrastructure financing in Indonesia.
“We express our sincerest appreciation to the Boards and Shareholders in supporting this remarkable achievement, not to mention all of IIF employees who have contributed into shaping IIF as it is today,” said Reynaldi Hermansjah, the Company’s CEO. “This exhibits not only the confidence from investors but also the high support of sustainable infrastructure development in Indonesia. We greatly value the assistance from World Bank in sharing the knowledge and experience with IIF and we are looking forward to supportive engagements on the technical assistance for post-issuance impact reporting.”
The Notes received orders from global investors who are well qualified and diversified, demonstrating strong investor appetite for IIF. By Geography, the issuance was distributed 72% to Asia and 28% to EMEA. By Investor type, the issuance was distributed 54% to asset managers / fund managers, 23% to insurance and pension Funds, 13% to banks and remaining 10% was distributed to private banks and other investors.
The Notes settled on 27 January 2021, and listed on the Singapore Stock Exchange on 28 January 2021. Barclays Bank PLC Singapore Branch, BNP Paribas, Citigroup Global Markets Singapore Pte. Ltd., and Mandiri Securities Pte. Ltd. acted as Joint Bookrunners. BNP Paribas and Citigroup Global Markets Singapore Pte. Ltd. acted as Joint Sustainability Structuring Advisors.
The offering of the securities does not constitute a public offering or private placement in Indonesia under Law of the Republic of Indonesia No. 8 of 1995 regarding Capital Markets (the “Indonesian Capital Market Law”) and its implementing regulations, including OJK Rule No. 30 of 2019 on the Issuance of Debt-Linked Securities and/or Sukuk issued by ways of Private Placement (“OJK Rule No. 30”). This announcement is for information only and nothing in this announcement constitutes an offer of securities for sale, or a solicitation of an offer to purchase securities, in the United States of America or any other jurisdiction where such offer, solicitation or sale would be unlawful. Any such securities will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and will not and may not be offered, sold or delivered within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, any such securities will only be offered and sold outside the United States of America in offshore transactions in reliance on Regulation S under the Securities Act. No public offering of such securities will be made in the United States of America or in any other jurisdiction where such an offering is restricted or prohibited.
The securities mentioned in this announcement have not been and will not be registered with the Indonesia Financial Service Authority (Otoritas Jasa Keuangan) and will not be offered or sold in the Republic of Indonesia or to Indonesian citizens, (whether domiciled in Indonesia or elsewhere) or to Indonesian residents, in a manner which constitutes a public offering under the laws and regulations in Indonesian, including OJK Rule No. 30.