New Delhi: International Finance Corporation today said it has completed its maiden onshore rupee bonds, the Maharaja Bonds, worth nearly USD 100 million from global and domestic institutional investors.
The IFC Maharaja Bonds, will be listed on the National Stock Exchange by this week, said the World Bank arm and NSE.
IFC, which raised over USD 1 billion in rupee-denominated overseas bonds last fiscal, has received a mandate to raise up to USD 2.5 billion more over the next five years, IFC global treasury head for client solutions Keshav Gaur told reporters.
"The Maharaja Bonds are issued under the USD 2.5-billion programme to help develop infrastructure for the domestic capital markets. The issuance follows IFC's successful completion earlier this year of a global rupee bond programme which raised USD 1 billion from investors globally," Gaur said.
The bond offers an innovative structure to attract different types of investors to the domestic capital markets. There are four tranches with different maturities under this programme. The issue comprises a 5-year bullet bond of USD 25 million, a 10-year bullet bond of USD 25 million and two separately tradable redeemable principal parts (STRPP) with maturity of between 13 and 20 years, he said.
The bond proceeds will be used for market infra investment here. This is the first international AAA issuance in the country. HSBC, ICICI securities and SBI Caps are the lead- arrangers to the issue, Gaur said.
"With these Maharaja Bonds, we are creating value for investors," IFC South Asia regional director Serge Devieux said.
"The Maharaja Bonds are an important issuance for the Indian fixed income markets. This was possible due to the combined efforts and commitment of the finance ministry and the regulators and the markets regulator Sebi. We believe issuances such as this will go a long way to create vibrant debt markets in the country," NSE managing director and chief executive Chitra Ramkrishna said.
The IFC issued a 5-year bullet bond with a fixed rate coupon of 8 per cent and a 10-year bullet bond with coupon of 7.97 per cent, both payable half-yearly. Both these bonds are priced around 50 bps below the government bond yields of comparable maturities.
The STRPPs include callable bonds and has been priced in a range of 20 to 30 basis points above the relevant maturity government bonds benchmark yields, with coupons of 8.88 per cent (for maturities of 13 to 18 years) and 9.00 per cent (for maturities of 19 to 20 years).
The 5 and 110-year maturities have been subscribed to by foreign institutional investors at yields below the relevant government bond benchmarks reflecting the value of IFC's international AAA rating.
This is the first time a bond issuance in the Indian domestic markets has been priced below the government securities benchmark yield curve.
In December 2013, IFC had said it would raise money through onshore bonds to help finance infrastructure projects and longer-term assets in the country.
IFC's latest initiative has multiple firsts to its credit - it is the first time ever that IFC issued onshore rupee-denominated bonds in India and it will also be the first time that the entire proceeds from an IFC's onshore bond programme will be used for infrastructure investments in the country.
