Indonesia’s Danantara investment fund calls on tycoons to buy low-yield ‘patriot’ bonds: Sources

JAKARTA – Several Indonesian tycoons have agreed to buy into a special bond issuance that aims to raise up to 50 trillion rupiah (S$4 billion), the first offered by Indonesian sovereign wealth fund Danantara, according to sources with direct knowledge of the matter.

The so-called patriot bonds are denominated in rupiah, have a coupon yield of 2 per cent and initially had a maturity period of more than 20 years. However, this was later negotiated to five- and seven-year tenors, a senior Danantara official told The Straits Times on Aug 25.

Bloomberg reported that Danantara seeks to issue the debt in five- and seven-year parts at 25 trillion rupiah each on Oct 1.

Both tranches of the patriot bonds offer below-market yields. In comparison, Indonesia’s benchmark five-year and seven-year sovereign bond yields currently stand at 5.9 per cent and 6.16 per cent, respectively.

“The bond yield is at a friendly rate (to the issuer). It wouldn’t have been called patriot bonds if it weren’t so,” said the Danantara official, who declined to be identified as he is not authorised to speak to the media.

The name of the self-styled “patriot” bonds hints at one’s love for the country in support of the offering.

ST understands that among the tycoons participating in the private bond offering are those who own conglomerates that have stakes in sectors such as mining, palm oil, food and beverage, and real estate.

The Indonesian government is believed to have met several local tycoons, including representatives from the Salim group and Nursalim family, on Aug 23 to brief them about details of the bonds and firm up their commitments – and many of them agreed to invest between two trillion and three trillion rupiah each.

Mr Thomas Tjhie, a close aide to Mr Anthoni Salim – who heads the Salim Group that owns the country’s largest noodle-maker Indomie – told ST that he did not have any information pertaining to the bond issue at the moment.

ST has also contacted the Nursalim family, which operates Indonesia’s first green special economic zone in Bali, for confirmation on the matter.

The bond issuance is aimed at helping to fund President Prabowo Subianto’s social and economic initiatives. These include energy transition, waste management and other high-impact projects, according to the senior Danantara official.

Since Mr Prabowo became president in 2024, his administration has embarked on many ambitious projects, including the 170 trillion rupiah free meals programme for students and pregnant women as well as plans to build one million affordable homes in urban areas for the lower-middle class.

Another senior Danantara official told a group of business people during an Aug 13 lunch – where ST was also present – that the government does not force these tycoons to buy the patriot bonds.

He said the businessmen had agreed to buy the bonds as they wanted to help out and are aware the proceeds will be used to help fund projects that will mostly benefit the people.

“The buyers of the bonds are successful individuals who have achieved so much and are now willing to give back to the society,” said the official during the social lunch gathering in Jakarta.

Mr Pandu Sjahrir, Danantara’s chief investment officer, said in a media statement on Aug 26 that the patriot bonds are a “strategic financing instrument” to “reinforce national financing independence”.

“Through this bond, the state gains stable medium- to long-term funding sources while businesses gain access to an investment instrument that is both secure and beneficial for the national economy,” he added.

Indonesia launched Danantara in February 2025 as part of efforts by Mr Prabowo to deliver an 8 per cent economic growth target within his first term.

Danantara serves as an investment vehicle and holding company for state-owned entities, and hopes to boost their roles in driving the national economy. The fund has about US$900 billion (S$1.2 trillion) in assets under management.

It is the country’s second sovereign wealth fund after the Indonesia Investment Authority and operates separately, reporting directly to the president. Its board members comprise former presidents, political allies close to the current administration and some influential names in business and finance.