IFC completes issuance of $1 bn in global rupee
bonds
The seven-year IFC bond
offering is the longest-dated issue to date in the offshore rupee markets, and
was 140 per cent oversubscribed
IFC, a member of the World Bank
Group, today issued seven-year bonds totaling Rs 1200 crore (approximately $194
million), bringing to $1 billion the total amount raised under IFC’s first
global rupee bond program. The program was launched last October to strengthen
India’s capital markets and attract greater foreign investment.
The 7-year IFC bond offering is
the longest-dated issue to date in the offshore rupee markets, and was 140 per
cent oversubscribed. Most of the investors were from outside Asia. The bond
yields 8.25 %.
Under the IFC global rupee bond
program, IFC has also issued three-year bonds totaling Rs 3,000 cr and
five-year bonds totaling Rs 2,000 cr.
“The very strong market
response to IFC’s first global rupee bond program highlights the growing
confidence of international investors in India’s economy. By offering a range
of tenors under the program, we were able to attract a broad range of investors
from around the world, bringing depth and diversity to the offshore rupee
market,” said IFC EVP and CEO Jin-Yong Cai.
Arvind Mayaram, Secretary of
Economic Affairs in India’s Ministry of Finance, said: “IFC is a key partner in
supporting the development of the private sector in India. With the global
rupee bond program, IFC made an important contribution to the development of
India’s capital markets, attracting foreign investment at this important
juncture and establishing an Indian rupee benchmark in the global markets.”
IFC global rupee bonds are
denominated in Indian rupees but settled in US dollars, with all principal and
coupon payments tied to the dollar-rupee exchange rate. IFC converts bond
proceeds from dollars into rupees on the domestic spot exchange market, and
invests the rupees in the country.
Over the years, IFC has issued
bonds in 14 emerging market local currencies, including the Brazilian real, the
Chinese renminbi, the Nigeria naira, and the Russia ruble. Often, IFC is the
first international or corporate issuer of local-currency bonds in a market.
When issuing local-currency bonds, IFC works closely with regulators and market
participants to refine the regulatory framework, encouraging greater
participation in the local markets and providing a model for global issuers.
India accounted for $4.5
billion of IFC’s committed investment portfolio as of June 30, 2013—more than
any other country. In FY13, IFC invested $1.38 billion in India to achieve
several strategic priorities such as promoting inclusive growth in India’s
low-income states, addressing climate change, and supporting global economic
integration.
http://www.business-standard.com/article/economy-policy/ifc-completes-issuance-of-1-bn-in-global-rupee-bonds-114041100418_1.html
