(Oct 21): Danantara is seeking to raise the equivalent of US$1 billion (RM4.08 billion) through a multi-currency loan, people familiar with the matter said, as the Indonesian sovereign wealth fund ramps up investments after deploying more than US$5 billion this year.

DBS Group Holdings Ltd, HSBC Holdings plc, Standard Chartered plc and United Overseas Bank Ltd are underwriters of the three-year revolving credit facility, the people said, who asked not to be identified discussing private information. The latest fundraising is an add-on to a US$1 billion loan it sealed last year, which is also being extended to match the tenor of the current one, the people said.

Proceeds from the latest loan being raised will be used for general corporate purposes, including financing acquisitions and investments in Danantara’s pipeline, the people said. It’s currently being syndicated to the broader market, they added.

A representative of Danantara didn’t respond to requests for comments.

Danantara’s fundraising plan coincides with the recent volatility in Indonesian equities, the world’s worst-performing. The nation’s benchmark stock index rebounded on Tuesday following a 15% two-day slide — its steepest since 1989 — after MSCI Inc warned it could remove the country from its global indices unless there are drastic improvements in market governance. 

It would be a major test of appetite among lenders toward Southeast Asia’s biggest economy as it confronts MSCI’s threat to downgrade the nation to stand-alone status, which could force funds to unload Indonesian stocks, triggering potentially billions of dollars in capital outflows.

Chief investment officer Pandu Sjahrir said earlier this month that Danantara is planning further rounds of fundraising, including possible bond sales in the US and China. The 20-month old wealth fund, which oversees hundreds of state-owned enterprises and controls assets that officials value at roughly US$900 billion, had planned to invest about US$13 billion this year, he said.

DBS, HSBC, Standard Chartered and UOB also underwrote Danantara’s facility last year, which carries an option that allows the borrower to increase it to as much as US$10 billion. 

The latest loan plan will pay margins similar to the previous deal, with the US dollar tranche offering 95 basis points over the benchmark secured overnight financing rate, the people said. Like the previous piece, the loan will be available in US and Singapore dollar, euro, British pound and yen, they said.

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