The Asian Development Bank (ADB) raised R300 crore (about $50 million) from its maiden issuance of offshore Indian rupee-denominated bonds, the multilateral agency said in a statement on Tuesday. The issuance is the first tranche under ADB’s $500-million offshore rupee-linked bond programme and aims to deepen India’s capital markets, the statement said.
The bonds, denominated in rupees but settled in US dollars, will have a coupon of 6.35% and will mature on August 17, 2016. The bond was sole-led by JP Morgan. 13% of the first tranche was placed in Asia; 42% in Europe, Middle East, and Africa; and 46% in the Americas. By investor type, 10% of the bonds went to central banks, 39% to banks, and 51% to fund managers, ADB said.
“There is clear demand for bonds linked to the Indian economy, Asia’s third largest, and the reception to ADB’s inaugural rupee-linked bond is reflective of this,” said Kazuki Fukunaga, ADB Deputy Treasurer. “ADB is committed to supporting development and poverty reduction in India through financing private sector projects such as those related to infrastructure and the financial sector and developing India’s capital markets.” he added.
Just last week, International Finance (IFC), the private sector arm of the World Bank, launched a $2.5-billion (R15,000-crore) onshore rupee-denominated bond issue, the proceeds from which will be used for its infrastructure projects in India. This came after a $1-billion offshore global rupee-denominated bond programme last year. IFC offered six separate tranches between November 2013 and April 2014; four with maturities of three years, one of five years, and the final tranche of seven years.
India is now ADB’s fourth largest shareholder and is its largest borrower, excluding cofinancing.