Indonesia has issued its first sovereign panda bonds in China’s interbank bond market, raising RMB7 billion (USD1.04 billion) in the largest single such issuance to date. Fangda Partners, A&O Shearman and its Indonesian associate firm Ginting & Reksodiputro provided legal support.
The offering comprised RMB5.6 billion of three-year bonds with a coupon rate of 1.9% and RMB1.4 billion of five-year 2.19% bonds. Bank of China acted as lead underwriter and lead bookrunner.
Fangda advised the issuer on PRC law, with partner Christine Chen leading the team. A&O Shearman and Ginting & Reksodiputro served as offshore legal counsel, with Jakarta-based partners Harun Reksodiputro and Mohammad Andrew on the team, while Hong Kong-based partner Agnes Tsang provided assistance.
Indonesia’s finance minister Purbaya Yudhi Sadewa told local media that the issuance was aimed at broadening the country’s access to renminbi financing, with the proceeds to be used to support this year’s national budget deficit and government spending. He said Indonesia could issue larger panda bonds in the future if further financing was needed.
Prior to Indonesia, Hungary, Egypt, Slovenia, Pakistan and Kazakhstan, among other countries, have tapped the sovereign panda bond market.
