The Export-Import Bank of India (India Eximbank) on January 4 opened the G3 bond issuance out of India, pricing a US$1 billion offering to help support the country’s project exports and overseas investment.

The Reg S/144A 10-year deal was priced at 98.999% with a coupon of 2.25% to offer a yield of 2.363%. This was equivalent to a spread of 145bp over the US treasuries or 40bp tighter than the initial price guidance of 185bp area and well inside the fair value point of its curve. The coupon is the lowest ever for a 10-year bond offering among the Indian issuers.

India Eximbank also tapped the US dollar bond market early in 2020, pricing a similar US$1 billion offering on January 6, with a coupon of 3.25% and a spread of 150bp over the US treasuries.

The latest bond generated a final demand in excess of US$3 billion from over 175 accounts, with several high-quality investors having to settle for less than their requested allocation, the bank says. In terms of geographic distribution, 55% of the bonds were sold in Asia, 29% in the US and 16% in EMEA region. By type of investors, fund managers accounted for 68%; sovereign wealth funds, central banks and insurance companies 17%; banks 14%; and private banks and other investors 1%.

In executing the transaction, India Eximbank deputy managing director. Harsha Bangari says the bank has been continuously monitoring the market for a possible issuance window.

“This is the only 10-year transaction by an Indian financial institution in the last one year,” she points out. “The quasi-sovereign nature of the bank and the EMBIG (emerging market bond index global) index eligibility of the bonds helped in the price tightening. The swift build to the book and the large book size, even after a significant tightening by 40bp, demonstrate the strong confidence of overseas investors in the India story and in India Eximbank. Throughout the lockdown period, the bank had been regularly engaging with overseas investors – a move that paid off well as investors bid aggressively.”

The bond proceeds will be used to provide funding for export lines of credit and buyer’s credit granted by India Eximbank to overseas governments, banks, institutions and other entities and for loans for overseas investment and/or participation in equity of the overseas joint ventures. They are also earmarked to fund import of capital goods by export-oriented units, concessional financing scheme and foreign currency loans. Barclays, Citi, HSBC, J.P. Morgan, MUFG and Standard Chartered acted as the joint bookrunners and lead managers for the transaction.

India Eximbank aims to promote the country’s international trade and investment. It offers Indian companies a comprehensive range of products and services, supported by analysis and research, with a view to enhancing their international competitiveness. The bank aggressively supports Indian exporting companies, especially medium-sized enterprises, in their globalization efforts through a variety of lending programmes.