Exim raises $1bn bonds at lowest yield since 2000

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MUMBAI: Export Import Bank of India (Exim Bank) has raised $1 billion by floating 10-year bonds offering a coupon of 3.375%, marking a revival in appetite for Indian debt. Exim Bank said that the yield on the bond is the lowest on a $500-million-plus bond since 2000.

In the last fortnight, Adani Transmission raised $500 million and pharma firm Glenmark mopped up $200 million. Earlier in July, mortgage giant HDFC and the region’s multilateral financial — Asian Development Bank, raised Rs 3,000 crore and Rs 500 crore, respectively, from international investors by floating rupee-denominated debt.

Exim’s bond issue was the largest by any Indian entity this year. The issue is rated BBB- by rating agency Standard & Poors, the same as the Indian government. Bankers say that the issue opens up the market for other top rated Indian corporates.

“The bank is the closest proxy to sovereign in the international markets and the 10-year issuance was based on investors’ feedback, so that benchmark 10-year curve out of India could be established,” said Exim Bank chairman Yaduvendra Mathur.

Exim had earlier indicated a yield closer to 3.6% but subsequently tightened the spread following a good response. The book was oversubscribed over two times despite tightening 22.5bps from the initial guidance, said Exim Bank DMD David Rasquinha.

Over 61% of bonds were picked up in the US, 20% in Asia and rest 19% in Europe. At 61%, US investor support was the highest for any issue out of India. Bank of America Merrill Lynch, Barclays, Citigroup, JP Morgan and Standard Chartered Bank acted as joint lead managers and book runners for the offering. Most of the bonds were picked up by fixed income investors (76%) and insurance and pension funds (11%).