Allen & Overy and Ogier have advised Indonesia’s national airline Garuda Indonesia, on its inaugural $500 million sukuk issuance, while Clifford Chance has advised a consortium of 15 banks in the transaction.
The sukuk is notable for three reasons: It is the first corporate global sukuk out of Indonesia, the first ever offshore U.S. dollar offering by an Indonesian corporate issuer and the first sukuk issuance utilising the airline capacity structure (as part of a sukuk-al-wakala structure) in Asia.
The offering was also done without any government or financial institution guarantee, making it the first Asia Pacific national flag carrier to successfully issue a U.S. dollar benchmark bond on a standalone basis since Qantas Airways’ U.S. dollar bond offering in April 2006.
Garuda Indonesia is expected to use part of the money raised from the sukuk issuance to refinance its debt (including Garuda Indonesia's existing $400 million shariah-compliant refinancing), with the rest being used for general purposes, including capital expenditure.
The Allen & Overy team was led by Singapore partner Kenneth Aboud and Jakarta partner Harun Reksodiputro, while the Clifford Chance team was led by Dubai partners Stuart Ure and Qudeer Latif. The Ogier team was led by Anthony Oakes, Ogier’s head of finance for Asia.