Exim Bank raises nearly Rs.6700 cr in single largest tranche abroad

The Dollar Business Bureau

The Exim bank of India has raised $1 billion (nearly Rs.6,700 crores) by selling 10 year bonds to overseas investors. Though the bank had initially intended to raise $500 million (around Rs.3350 crore), seeing the strong demand from the investors, the issue was increased to $1 billion, Exim Bank revealed in a statement. This is the bank’s first transaction in the Regulation S and 144A rule format of the US.

The issue attracted an excess of $2.50 billion (nearly Rs.16,632 crores) from over 157 eager investors. The bank officials said that this was the largest issuance and the largest single tranche issuance that the Bank has experienced from overseas investors in 2016.

The Regulation S of US is a safe ground for investors, when an offering of securities is deemed to be executed in another country and is therefore not subject to the registration requirements specified under section 5 of the 1933 Act. The regulation provides for two safe harbour provisions: an issuer safe harbour and a resale safe harbour.

Yaduvendra Mathur, Chairman and Managing Director of Exim Bank said, “the bank is the closest proxy to sovereign in the international markets and the 10 year issuance was based on investors' feedback, so that benchmark 10 year curve out of India could be established.”

He also specified that the funds raised will be used by the Bank to support overseas investment by extending long term credit and its lines of credit portfolio and also support Indian exports overseas.

Having initially marketed the deal at 210 basis points over US Treasuries, the bank was able to achieve a final pricing of 187.5 basis points over US Treasuries to yield 3.383 percent on a coupon of 3.375 percent resulting in negative new issue premium against a very strong backdrop a bank official revealed.