DLA Piper advises on maiden USD bond offering by Indonesian state-owned infrastructure and finance special mission vehicle

DLA Piper has advised Bank of America, DBS Bank, Mandiri Securities., MUFG and Standard Chartered Bank as arrangers and dealers in respect of a maiden US dollar bond offering by PT Sarana Multi Infrastruktur (Persero) (SMI), a State-Owned Enterprise whose entire share capital is owned by the government of the Republic of Indonesia through the Ministry of Finance.

The USD300 million five year Senior Unsecured Fixed Rate Notes (the “Notes”) are issued under SMI’s newly established USD2 billion Euro Medium Term Note Programme which DLA piper also advised on as sole international transaction counsel to the arrangers and dealers.

The Notes attracted strong interest from a wide range of investors, which allowed SMI to tighten final price guidance to 2.050% representing price tightening of 35bps from the initial price guidance. This is the lowest spread over the respective US Treasuries ever achieved by an Indonesian Financial Institution. The Notes have been assigned a rating of BBB by Fitch Ratings.

SMI is the only special purpose mission vehicle of the Ministry of Finance of the Republic of Indonesia for infrastructure and finance. Its key mission is to support the country's infrastructure development by extending financing to infrastructure projects and providing financial, investment and training advisory services for public-private partnership (PPP) projects. It plays an active role in supporting the implementation of PPP and encourages the acceleration of infrastructure development in the region through regional financing products.

The DLA Piper team was led by Singapore-based Corporate partner and Debt Capital Markets Asia Pacific practice head, Philip Lee, with support from senior associates Mei Sum Chan and Andhari Sidharta, and trainee Jen Lee.

Philip Lee commented: “We would like to thank SMI and the arrangers and dealers for appointing us to represent them on this important transaction which is a landmark capital raising transaction for both SMI and the Indonesian finance industry. The transaction was executed in the record time of just over three weeks from kick-off to launch to allow SMI to access an important issue window which resulted in the successful deal pricing achieved by SMI. This deal demonstrates DLA Piper’s first class documentation, disclosure, transaction execution and management capabilities, particularly for first time issuers in emerging markets.”

This is the latest in a long list of transactions the Firm has advised on debt offerings, particularly in the infrastructure sector. Other recent transactions include Hangzhou Qiantang New Area Construction and Investment Group’s USD300 millio international bond issuance and HCL Technologies’ USD500 million senior notes issuance, the highest ever rated credit from India.