Indonesia Begins Selling First Global Islamic Bond

Jakarta, Indonesia | April 20, 2009 by D-8 Secretariat

Indonesia Begins Selling First Global Islamic Bond

Indonesia has started selling its first global Islamic bonds, which a finance ministry official says could raise up to $650 million. Finance Minister Sri Mulyani Indrawati said the offering for the sukuk — a bond structured to avoid paying interest in line with the teaching of the Quran — opened early Thursday and would close within 24 to 36 hours. She declined to say how much money would be raised from the bond sale, telling reporters in the capital, Jakarta, “Let’s just see how the bidding process comes along.

The world’s largest Muslim-majority nation and Southeast Asia’s biggest economy delayed earlier plans to offer Islamic bonds internationally because of the global financial crisis.

Its decision Thursday follows improved market sentiment at home following general elections last week that paved the way for Indonesia’s reform-minded president to win a second, five-year term in office. Rahmat Waluyanto, a senior Finance Ministry official, said the global sukuk issuance would be between $500 million and a maximum $650 million.

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