 "fund raising through bonds")
Falling bond yields in global markets and a sound financial profile are helping Indian companies and financial services firms to raise hard currency funds at robust rates.
Over the weekend, state-owned Export Import Bank of India announced it would raise $1 billion through 10-year dollar-denominated bonds.
The Initial guidance was 210 basis points over the yield on US treasuries but tough negotiations cut that by 22.5 bps to 187.5 basis points over US treasury yields. The coupon on bond now is 3.375% for EXIM Bank offering. One basis point is one-hundredth of a percentage point.
Mortgage major HDFC became first Indian unit to raise money via so-called masala bonds. These are Indian rupee-denominated bonds placed in global market. The currency risk is borne by investors and not the issuer.
HDFC raised Rs 3, 000 crore through the 37-month maturity paper, at a fixed semi-annual coupon of 7.87%.
Adani Transmission Ltd also raised Rs 500 crore through Masala Bonds. ATL has signed pact with Credit Suisse AG, for Masala bond with a coupon of 9.10% notes due 2021.
Rating agency India Ratings and Research said the uncertainty in global markets and the resultant flight to safety has resulted in $ 11.7 trillion worth of negative yielding sovereign debt. This provides opportunity for highly rated entities in India for tapping the masala bond market.
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It will allow issuers to diversify their investor base and also provide investors a reasonable yield with the expectation of a relatively stable currency, it said.
