Markets

Exim Bank taps Samurai bond market to raise Rs 1,000 cr

| | Updated on: Nov 26, 2014

The Export-Import Bank of India (Exim Bank) has issued 10-year bonds in the Japanese bond market (Samurai bonds) for ¥20 billion (about $170 million or Rs 1,000 crore).

Japan Bank for International Cooperation’s (JBIC’s) guarantee will cover the principal and part of the interest of the privately placed Samurai bonds. Daiwa Securities, Mitsubishi UFJ Morgan Stanley Securities, Mizuho Securities and SMBC Nikko Securities were the Joint Lead Arrangers to the issue, Exim Bank said in a statement.

Samurai bonds are yen-denominated bonds issued by a foreign government or company in the Tokyo bond market.

The bond was priced at 0.97 per cent (YSO+27 bps) for 10 years. The guarantee was extended under JBIC’s Guarantee and Acquisition towards Tokyo Market Enhancement (GATE) facility.

Exim Bank achieved the tightest spread and the lowest coupon, the first sub-one per cent, in the history of the GATE facility. The previous record for the lowest coupon was held by the bonds issued by the Government of Turkey (1.05 per cent), the statement added.

This transaction was a repeat issuance for Exim Bank in the Samurai bond market after its inaugural JBIC guaranteed Samurai bond in 2011.

The proceeds of the Samurai bonds will be used by Exim Bank to fund Indian project exports to Sri Lanka for financing railway projects in Sri Lanka.

Given the low levels of yield in the Japanese market, the Japanese bond market is an attractive option for issuers from India. The renewed optimism on the economic outlook for India and also the bold quantitative easing announced by the Bank of Japan have increased the appetite for the Indian paper in the Japanese market, it said.

Published on November 26, 2014

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