Exim Bank raises $1 b via 10-year bond issue

Export-Import Bank of India (India Exim Bank) on Tuesday said it has raised $1 billion via a 10-year bond issuance.

The coupon of 2.25 per cent is a record low for any 10-year bond issuance out of India and the issue was oversubscribed by more than 3.5 times, the financial institution said in a statement.

The funds will be used by the bank to support Indian project exports, overseas investment by way of long-term credit and its export lines of credit portfolio, it added.

David Rasquinha, Managing Director of India Exim Bank, said, “With the upsurge in GST numbers, improvement in GDP, and the recent approval of vaccines, the confidence in the India story is surging once again.

“With a strong market opening trade from India Exim Bank, many other Indian issuers are likely to follow suit to access the foreign currency bond market.”

Harsha Bangari, Deputy Managing Director, observed that India Exim Bank’s bond issuance is the only 10-year transaction by an Indian financial institution in the last one year.

The quasi-sovereign nature of the bank and the Emerging Market Bond Index Global (EMBIG) index eligibility of the bonds helped in the price tightening from the initial price guidance of CT10 (10-year US Treasury Bonds) + 185 basis points (bps) to the final CT10+145 bps, she added. One basis point is equal to one-hundredth of a percentage point.

In terms of geographic distribution, the bonds were distributed 55 per cent in Asia, 29 per cent in the US and 16 per cent in the EMEA (Europe, Middle East, Africa) region, India Exim Bank said.

In terms of distribution, the bonds were distributed to fund managers (around 68 per cent), sovereign wealth funds, central banks and insurance companies (17 per cent), banks (14 per cent) and private banks and others (1 per cent), it added.