Indonesia’s bond market received a welcome fillip on Friday when the supreme court announced it had overturned rulings freeing a subsidiary of Asia Pulp and Paper from repaying bonds worth $500m to foreign creditors.

The verdict against Indah Kiat and in favour of 14 issuers, arrangers and holders of the bonds, including Oaktree Capital, Gramercy, Morgan Stanley bank and Mizuho bank, reaffirms the legality of the financing system that Indonesian companies have used for decades to issue overseas bonds.