(Nov 19): Indonesian sovereign wealth fund Danantara has lined up a multi-currency syndicated credit facility equivalent to US$1 billion (RM4.1 billion), according to people familiar with the matter, months after having approached banks for as much as US$10 billion.

DBS Group Holdings Ltd, HSBC Holdings Plc, Standard Chartered Plc and United Overseas Bank Ltd are underwriting the three-year revolving credit facility, the people said, who asked not to be identified discussing private matters. Proceeds from the line of credit, which is unsecured, will be used for general corporate purposes, including acquisitions and investments, they added.

The new facility comes about five months after Danantara sought proposals for a borrowing of as much as US$10 billion from regional and international banks in June, which would have been Southeast Asia’s largest loan. The fund initially shortlisted Natixis SA alongside DBS, HSBC and Standard Chartered as coordinators, but the French bank later withdrew, the people added.

Danantara will pay interest of 95 basis points over the Secured Overnight Financing Rate for US dollar borrowings, the people said. It can also borrow in Singapore dollars, euros, British pounds and the yen at spreads ranging from 90 to 100 basis points above other interest rate benchmarks.

There is an option to increase the facility to as much as US$10 billion, the people said.

The deal marks a significant test for the newly established fund, which Indonesian President Prabowo Subianto sees as central to his goal of lifting the country’s economic growth back to around 8% — levels last seen in the mid-1990s. Danantara executives have said it oversees nearly 900 state-owned enterprises, bringing assets under its control to around US$1 trillion, which makes it one of the world’s largest sovereign wealth funds.

A representative for Danantara confirms that it is raising the revolver with the four international banks, adding that the facility is not new debt, but a “flexible liquidity tool used by global investment institutions to manage investment timing and optimise cash flow.”

Danantara, formally known as Daya Anagata Nusantara, has been tapping markets to bolster its finances. Last month, it raised 50 trillion rupiah in so-called patriot bonds, according to a filing. The issuance was backed by pledges from some of the nation’s wealthiest tycoons, Bloomberg News reported earlier.

The borrower of the new facility is Danantara Investment Management, the fund’s investment arm, which plans to prioritise investments in strategic domestic sectors such as critical minerals, renewables, energy and utilities, among others, according to a document seen by Bloomberg News. In its early years, the portfolio will focus on investing in public markets, with sector-specific platforms to follow, the document shows, adding that projected growth could reach beyond 1,000 trillion rupiah by 2032 and include private market investments.

Danantara has already injected 50 trillion rupiah into its investment management arm, which could also receive 40% to 60% of annual dividends from the state-owned enterprises under its control to fund new investments, according to the document.

Uploaded by Magessan Varatharaja