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IFC issues new infrastructure investment bonds for India
The International Finance Corporation (IFC), a member of the World Bank, on November 10 issued a 10-year, 10 billion rupee bond (US$163 million) to increase foreign investment in India, mobilizing international capital markets to support infrastructure development in the country.
The Asset 11 Nov 2014

The International Finance Corporation (IFC), a member of the World Bank, on November 10 issued a 10-year, 10 billion rupee bond (US$163 million) to increase foreign investment in India, mobilizing international capital markets to support infrastructure development in the country.

 

The "Masala bonds" mark the first rupee bonds listed on the London Stock Exchange. 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.

 

IFC executive vice-president and CEO Jin-Yong Cai says the bond issue demonstrates the powerful role that capital markets can play in linking international savings to infrastructure investment. The strong demand from investors, he adds, signals continued momentum for the Indian economy.

 

Tarun Bajaj, joint secretary at the department of economic affairs, adds: "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."

 

Chancellor of the exchequer George Osborne notes: "If we can create strong financial links between our two countries, 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."

 

The bonds, which yield 6.3%, were issued under IFC's US$2 billion offshore rupee programme. J.P. Morgan is the sole arranger for the transaction.

 

IFC issued the bonds in London to leverage the city's standing as a premier financial centre. The vast majority of investors are European insurance companies.

 

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