Export Import Bank of India (Exim) opened its $500 million bond issue on Wednesday which is likely to be priced at 155-160 basis points above the 5-year US Treasury yields, according to sources close to the development. The bond issue comes with a tenure of 5.5 years.
Standard Chartered, Citi bank and Barclays were the book runners for the issue, according to a source. Moody’s Investors Service had assigned a Baa3 rating to the proposed USD benchmark size senior unsecured notes, according to a press release. It added that the bonds are part of the $6 billion Medium Term Note (MTN) programme and will be listed on the Singapore Exchange.
Bond arrangers are very positive on the international appetite for Indian bonds which is evident from the fact that till date, India saw $2.53 billion worth of offshore issuances from the beginning of 2015, if Exim Bank’s $500 million can be considered.
Exim bank had issued the same category of bonds worth $500 million in March 2014 at 3.96%. In November 2014, the bank had raised more than R1000 crore via Samurai bonds from the Japanese bond markets at a coupon rate of 0.97%.
This is the fourth offshore issuance this year after two issues by Reliance Industries (RIL) and one by Delhi International Airport (DIAL).
RIL on Tuesday had issued $750 million via offshore bonds of 30-year tenure at a coupon of 4.875%. The company claimed in a press release that the issue opened the 30-year market for corporate issuances out of Asia in 2015 and it was the lowest coupon ever achieved by an Asian private corporate issuer for a 30-year issuance. Earlier, RIL had raised $1 billion through 10-year bonds at a pricing of 4.249% in January.
DIAL had also raised $288.75 million through 7-year dollar-denominated bonds at a coupon rate of 6.125%. The company had tapped the offshore bond markets for the first time and the issue was the first high-yield issue out of Asia.
In 2014, offshore issuances by Indian firms touched a record high of $18.6 billion. Bond market experts expect this figure to cross $20 billion this year, over a tenth of which has already been achieved. However, the market is not entirely free of concerns.