* Indonesia seen raising $500-600 mln in global sukuk sale
* Yield guidance at 9.25 pct area; pricing on Thurs - source
* Sukuk market in doldrums as Gulf investors suffer
* Indonesia closer to $9 bln funding requirement for year (Updates with official price guidance, orderbook, price timing)
By Rafael Nam and Sonya Angraini
HONG KONG/JAKARTA, April 15 (Reuters) - Indonesia is looking to sell its first ever global Islamic bond as early as Thursday, the government said, reviving a sale that will test demand in a sukuk market badly hurt by the global financial crisis.
After delaying the sale from late last year at the height of the crisis, Southeast Asia's top economy is selling a benchmark 5-year dollar-denominated sukuk. The sale was confirmed by Finance Minister Sri Mulyani Indrawati, but she declined to comment further when addressing reporters in Jakarta.
Indonesia is seen raising $500 million-$600 million via the sale, marking a first for the country that has the world's largest Muslim population, as it seeks to plug a budget gap estimated at 2.5 percent of gross domestic product this year.
The country set guidance for its sukuk at a yield of around 9.25 percent, having attracted "north of $1.5 billion" in orders as of Wednesday evening in Asia, said a source with direct knowledge of the deal, but not authorised to talk publicly.
The country already raised $3 billion in dollar-denominated sovereign bonds in February and plans to sell up to $1.5 billion in Samurai bonds, or debt issued in Japan by foreign entities. These sales are putting Indonesia within sight of its goal to raise a total of about $9 billion this year.
Pricing could come as soon as "in 24 hours", Rahmat Waluyanto, director of debt management at the Indonesia finance ministry, said by text message.
"This is an attempt by Indonesia to say we want to be a player in the Islamic financial markets," Raj M Maiden, managing director at Singapore-based consultancy firm Five Pillars.
"Is it the return of the sukuk? I think it is an attempt to bring it on," he added. "The outlook is still a little bit unclear."
The intended pricing for the sukuk compares with the 10.5 percent yield at which Indonesia sold a five-year dollar bond in February. That debt has since rallied and was last trading at around 8.5 percent <455780BB1=>.
There has been no sale of dollar-denominated sukuk this year in the once high-flying market. Issuance had already slumped to $1.9 billion last year from the record $10.3 billion sold in 2007, according to Thomson Reuters data.
Unlike conventional debt, sukuk pays returns derived from underlying assets, often in the form of assets such as real estate, given that Islamic law bans the payment of interest.
The global financial crisis has dented Gulf economies that had served as an investor base for these products, while a property downturn in cities such as Dubai have further led to the slowdown in Islamic bond sales.
PLUGGING THE DEFICIT
Indonesia is getting closer to its full year target of raising around 100 trillion rupiah ($9.15 billion) in a quest to plug its deficit, having so far raised 73 trillion rupiah from bond sales both domestically and overseas.
Its sukuk issuance will adopt an ijarah structure, or a real estate sale and leaseback format between Indonesia and a special purpose company created by the government for the purpose of issuing these bonds.
The underlying assets backing the issuance will include government property in Jakarta and West Java.
Indonesia's economy has been hit by the global downturn, though not as badly as other Asian countries given that domestic consumption accounts for two-thirds of GDP.
Credit ratings agencies have also described Indonesia's external and fiscal position as manageable.
Still the drop in commodity exports has hit Indonesia, with the Asian Development Bank (ADB) estimating growth this year will slow to 3.6 percent this year down from 6.1 percent in 2008.
The authorities in Jakarta have taken several steps to protect the economy, including a 73.3 trillion rupiah ($6.35 billion) fiscal stimulus package.
Indonesia has mandated Barclays Capital, HSBC
The sukuk was rated 'BB-minus' by Standard & Poor's and 'Ba3' by Moody's Investors Service, or three notches below investment-grade. Fitch has rated the debt at 'BB'. All three ratings are in line with Indonesia's sovereign ratings. (Additional reporting by Muklis Ali in JAKARTA; Editing by Tomasz Janowski, Kazunori Takada and Toby Chopra)