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View all search resultsPatriot bond issuance sparks concerns
Several conglomerates have publicly voiced support for the privately placed bond, which is reportedly oversubscribed ahead of the launch.
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People pass by the headquarters of state asset fund Danantara in South Jakarta on July 1, 2025. (Kompas/-)
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head of the launch of the so-called patriot bonds to be issued by state asset fund Danantara, critics warn prospective investors may feel nudged to bankroll the state by buying the privately placed securities at below-market yields in the name of nationalism.
Wijayanto Samirin, an economist at Paramadina University, told The Jakarta Post on Wednesday that investors would be motivated not by returns but by a desire to support the state, “though it’s not impossible that some may buy under pressure.”
He warned that any “blatant coercion” could spook investors and destabilize the bond market, even if the issuance was understandable given Danantara’s need to fund investments and restructure struggling state-owned enterprises (SOEs).
Read also: Indonesia banks on Danantara to reignite stalled waste-to-energy projects
The state asset fund reportedly plans to raise Rp 50 trillion (US$3.1 billion) through the issuance scheduled for Oct. 1, split into five- and seven-year tranches of Rp 25 trillion each.
Both would carry a 2 percent coupon, well below comparable government bond yields of around 6 percent, depending on market conditions and tenor.
“A 2 percent coupon is far too low to be attractive, especially when comparable government bonds yield nearly triple that,” said Doddy Ariefianto, a banking analyst at Binus University.
