IFC Issued First Masala Bonds in London to Attract International Investment for Infrastructure in India
IFC issued a 10-year, 10 billion Indian
rupee bond (equivalent to $163 million) in November 2014 to increase foreign
investment in India, mobilizing international capital markets to support
infrastructure development in the country.
The “Masala bonds” marked the first
rupee bonds listed on the London Stock Exchange. The bonds were issued under
IFC’s $2 billion offshore rupee program and they are the longest-dated bonds in
the offshore rupee markets, building on earlier offshore rupee issuances by IFC
at three-, five- and seven-year maturities. Proceeds from the offering will
support a forthcoming infrastructure bond issuance by Axis Bank.
“This bond issue demonstrates the
powerful role that capital markets can play in linking international savings to
infrastructure investment. The strong demand from investors signals continued
momentum for the Indian economy,” said Jin-Yong Cai, IFC
Executive Vice President and CEO.
Joint Secretary, Department of Economic Affairs of Indiasaid: “IFC is a key development partner as we continue to focus on
deepening the capital markets. The IFC Masala bonds set a triple-A benchmark for offshore rupee issuances
and pave the way for more foreign investment to help meet India’s private
sector development needs."
Osborne, Chancellor of the Exchequer, United Kingdomsaid: “Increasing our links with
India has been a personal priority for me which is why I went to see Prime
Minister Modi earlier this year to promote our economic relations and gave my
backing to the new Gandhi statue in parliament square. If we can create these
strong financial links between our two countries as well, then the ties will be
deeper still which is why I have been personally pushing for rupee bonds to be
issued in the UK markets and I am delighted this is now going ahead.”
IFC issued the bonds in London to
leverage the city’s standing as a premier financial center. The vast majority of
investors are European insurance companies.
In March 2014 IFC became the first
multilateral institution to listrenminbi-denominated bondson the London Stock Exchange, which was followed by the issuance of
IFC’s first renminbi-denominated
green bonds in June
2014. Prior to 2014, IFC pioneered the international issuance of
renminbi-denominated bonds in China (Panda bonds) and Hong Kong (Dim Sum
bonds). IFC was also the first to set up a program to regularly issue offshore
renminbi-denominated discount notes.