Indonesia sells landmark $2b sukuk

The Southeast Asian nation prices the largest single-tranche Islamic bond ever despite volatile market conditions, obtaining a total order book of $6.8b.

The Republic of Indonesia sold a $2 billion 10-year Islamic bond, or sukuk, during Asian morning hours on Friday, pricing the world's largest-ever single-tranche shariah-compliant offering.

Rated Baa3BBBBB-, the Reg S144A note priced at 4.325%, 22.5 basis points tighter than its initial price guidance area, according to a term sheet seen by FinanceAsia.

The sukuk, which is also Indonesia's largest dollar Islamic bond ever, was sold through special purpose vehicle Perusahaan Penerbit SBSN Indonesia III and under the sovereign’s existing trust certificate issuance programme, the limit for which was raised to $10 billion in April from $5 billion previously.

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