Indonesia’s Kangaroo Bond Oversubscribed, Signals Strong Global Investor Demand

REPUBLIKA.CO.ID, JAKARTA - The Indonesian government issued an initial Kangaroo Bond worth 800 million Australian dollars through the Australian Medium-Term Notes (AMTN) program. The transaction was made on August 7, 2025 and approved August 14, 2025.

The 5-year series is worth 500 million Australian dollars with a 4.40 percent coupon, while the 10-year series is worth 300 million Australian dollars with a 5.30 percent coupon. The total orderbook stands at almost 8 billion Australian dollars, indicating very high global investor interest. 

The largest investor distribution is from Asia, 43 percent in the 5-year series and 53 percent in the 10-year series. Asset managers dominate 35—42.3 percent of total investors.

The bond was rated Baa2 by Moody's, BBB by Standard & Poor's, and BBB by Fitch. ANZ, Standard Chartered Bank, and UBS Bank became Joint Lead Managers of this transaction. Senior Economist at DBS Bank Eurozone, India, Indonesia, Radhika Rao highlighted that strong demand at this week's debt auction indicates positive momentum in the Indonesian government bond market.

“Although benchmark 10-year bond yields declined this month, short tenors gained more due to dovish BI expectations, the influx of dollar flows, and the weakening of the US dollar,” Radhika was quoted as saying Monday (18/8/2025).

Radhika added that the issuance of the Kangaroo Bond also helped the government diversify funding sources. The bond was heavily oversubscribed, attracting nearly 8 billion US dollars in bookings and causing prices to be 25—30 bps tighter than initial guidance.

Radhika confirmed that Kangaroo Bond is proof of the strong global demand for Indonesian debt securities. This issue also shows the positive momentum of the domestic bond market that the government could leverage for its 2025 state budget financing strategy.