Exim Bank set to raise $1 billion via global bond sale

Exim Bank is on course to raise more than $1 billion through a dual tranche global bond issue that includes a 30-year paper, a first for any financial institution from India seeking to benefit from the record low global spreads for Indian issues. Reliance Industries, India's most-valued company, was the first local entity to raise money overseas in 30-year bonds.

The government-backed sovereign institution had garnered a book of more than $8 billion until the end of bidding. It saw the tightest ever spread over the benchmark US bond for both the issues.

The 10-year bond was priced at 85 basis points above the US benchmark, tighter than the initial guidance of 115 basis points above the benchmark US treasury that traded at 4.18% on Monday, indicating a final pricing around 5.03%.


One basis point is 0.01 percentage point.

Pricing on the rare 30-year issue was tighter at 95 basis points above the similar US benchmark, tightening from an initial spread guidance of 140 basis points. The final price was 5.82%.

Exim did not respond to ET’s emailed queries until the publication of this report.

“Demand was strong, especially in the longer tenure bond because it is rare to see such an issue from India,” said a person aware of the transaction. “Spreads between the US benchmark and Indian paper are near their tightest levels as companies are looking at the domestic market because of lower rates there. But for issuers like Exim that deal in foreign currency anyway, it’s a good time to tap a never before 30-year bond and set a benchmark.”

Standard Chartered, HSBC, Citibank, JP Morgan and Bank of America are the bankers to the issue.

Reliance Industries had raised $1.75 billion in a 30-year bond issue back in January 2022. That issue also included 10-year and 30-year bonds as the Indian conglomerate had raised a huge $4 billion.

“This is also the first dollar bond issue after the S&P upgrade last year. For Exim, this is the tightest spread helped by weak supply of Indian paper and also due to the fact that the issuer is considered a sovereign entity,” said a second person aware of the details.

In August last year, S&P upgraded India's long-term sovereign credit rating to 'BBB' from 'BBB-', citing strong economic growth, improved monetary policy credibility, and sustained fiscal consolidation.