S&P Says Danantara Fundraising Plan Boosts Fiscal Flexibility

A strategy by Indonesian sovereign wealth fund Danantara to raise capital is offering the government more flexibility in managing its finances and sprawling state-owned firms, according to S&P Global Ratings.

The wealth fund has helped ease fiscal pressures by securing financing at far lower costs than the government, said Rain Yin, a sovereign analyst at S&P. Its recent $3 billion patriot bonds issuance carried a 2% coupon — less than half the government’s borrowing cost — underscoring efforts to avoid an explicit drain on the budget.