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ndonesia's first sale of dollar-denominated sukuk was seven times oversubscribed, with orders received totaling US$4.7 billion.

The demand recorded was around seven times higher than the $650 million of Islamic bonds offered by the government, according to a Finance Ministry statement.

"Investors' appetite to buy the dollar-denominated global sukuk was so high, be it sharia investors or conventional investors," said the statement on Friday.

The five-year sukuk bonds maturing on April 23, 2014, have a 8.8 percent yield, or 7.04 percent more than US Treasuries with similar maturity.

The yield will be paid every six months, on April 23 and Oct. 23.

In February, the government sold $2 billion of regular 10-year bonds overseas, with a yield of 11.75 percent, or 8.76 percent more than US debts.

"The issuance is the largest straight issuance of dollar-denominated sukuk, outside of the Gulf Cooperation Council (GCC). And it is the first benchmark of dollar-denominated sukuk in Asia since 2007," added the statement.

The global sukuk were ordered by Asian investors (32 percent), Middle East investors (30 percent), US investors (19 percent), European investors (11 percent) and Indonesian investors (8 percent).

The orders came from fund managers (45 percent), banks (37 percent), retail investors (14 percent) and insurance and pension fund companies (4 percent).

The sukuk were rated Ba3 by Moody's Investors Service, BB- by Standard and Poor's and BB by Fitch Ratings.

Barclays Plc., HSBC Holdings Plc. and Standard Chartered Plc. were all designated arrangers.

Analysts said demand for the global sukuk rose as investors were attracted by Indonesia's stable political and economic conditions.

Indonesia just had its legislative election completed in early April, with early poll results showing President Susilo Bambang Yudhoyono's Democratic Party leading the polls, boosting the liklihood that the President would later be re-elected.

The presidential election is set for July 8.

Finance Minister Sri Mulyani Indrawati said this week the economy may expand between 4 percent to 4.5 percent this year.

The economy is expected to expand 5 percent next year as the global economy rebounds.

The government issued the global sukuk to help plug this year's budget deficit, which might reach Rp 139.5 trillion ($12.8 billion), or 2.5 percent of Indonesia's gross domestic product (GDP).

The government has had to widen the state budget deficit, as it has allocated more spending, including the stimulus package, to bolster the economy and help maintain economic growth, which has been slowed by the global downturn.

The stimulus package which has been set at Rp 73.3 trillion, includes tax measures to support industries hit by the economic slowdown so they can avoid layoffs, which would otherwise hurt the economy further and reduce purchasing power.