* Indonesia picks 3 banks for sovereign sukuk
* Deutsche Bank, HSBC, Standard Chartered to run deal
* Sukuk due before year-end - sources
(Adds comment, background)
By Bernardo Vizcaino and Mirna Sleiman
DUBAI/JAKARTA, Sept 6 The Republic of Indonesia
has mandated Deutsche Bank, HSBC and
Standard Chartered for a new global Islamic bond, or
sukuk, issue, the acting head of the country's debt office
confirmed on Thursday.
The official, Robert Pakpahan, was responding after two
banking sources told Reuters the three banks had been chosen and
that the sale would go ahead before the end of the year.
In August, Pakpahan said the state planned to issue a $1
billion sukuk in late October, as well as $750 million worth of
Indonesia, the world's most populous Muslim country, last
tapped global debt markets in April with a $2.5 billion
The $2 billion ten-year bond, which priced at
3.75 percent, was yielding about 3.2 percent on Thursday,
according to Thomson Reuters data. Meanwhile, the $500 million
30-year bond, which priced at 5.25 percent, was
yielding around 6.7 percent.
Low interest rates are enabling governments across Southeast
Asia to raise spending on infrastructure - one of the region's
big weak spots.
Indonesian President Susilo Bambang Yudhoyono announced
during a speech last month that he would boost capital spending
by 15 percent to 193.8 trillion rupiah ($20.25 billion) in 2013
to improve the road network in the archipelago nation and to
finance 15 new airports.
Indonesia's 5-year credit default swaps, or
the cost to insure its debt against default, stood at just over
170 basis points (bps) on Wednesday, down from over 255 bps in
early June. Credit default swap prices can be an indicator of
Indonesia's central bank governor, Darmin Nasution, said on
Wednesday that the country will grow 6.4 percent in 2012 and 6.6
percent next year, with the bank adopting policies that promote
growth while containing inflation.
In June, the central bank said economic growth could fall at
the low end of the 6.3 to 6.7 percent GDP forecast for 2012.
($1 = 9570.0000 Indonesian rupiahs)
(Additional reporting by Janeman Latul and Adriana Nina Kusuma
in Jakarta; Editing by David French)