Indonesia

Indonesia’s Titan Infra Energy is tapping the offshore loan market for the first time for a $450m five year loan.

The terrible earthquake and tsunami that hit Indonesia’s Sulawesi island last month has served as a wake-up call for the country’s Ministry of Finance, which is now looking at issuing catastrophe bonds.

The International Finance Corp became the first issuer to launch a green Komodo bond — an offshore bond in Indonesian rupiah — on September 28. But the World Bank had the same idea: it launched a sustainability bond in rupiah the following week.

Indonesian power company Perusahaan Listrik Negara has closed its debut offshore loan after exercising part of the greenshoe option.

Emerging market investors are on edge, and rightfully so, as Turkey, Argentina and South Africa face up to serious economic problems. In Asia, that has triggered outflows — and risk aversion — from Indonesia, which is in a much stronger shape than its peers. But the volatility presents an opportune time to scrutinise the south-east Asian country closely.

Weak emerging market investor sentiment is dragging on Indonesian high yield bonds, with market watchers blaming the dive on a spill-over effect from other emerging markets. But there are still some silver linings for the island nation.

Indonesian motorcycle financing firm Federal International Finance (FIF) has returned to the offshore loan market for a $200m borrowing.

Indonesia’s Modernland Realty raised $150m on Tuesday to offset some of its pressing debt maturities, becoming the country’s first high yield bond issuer since May.

High yield property company Intiland Development flopped in the offshore market on Tuesday, failing to price what would have been its debut dollar deal.

Bank Rakyat Indonesia (BRI) raised $500m from a five year bullet bond on Monday, proving investment grade issuers can still secure deals if the price is right.

Indonesian power company Perusahaan Listrik Negara is seeking an up to $2bn debut loan, but has surprised some bankers with the tight pricing on offer.

Attractive pricing in the dollar loan market is pushing Indonesian borrowers offshore, despite guidance from the country’s central bank to curb foreign currency debt exposure.