IFC raises $250 million 'masala' bonds

MUMBAI: International Finance Corporation or IFC, the World Bank’s private-sector financing arm, has launched the rupee-denominated offshore bonds for Rs 1,600 crore or about $250 million, attracting first time investors to the overseas rupee markets.

Those securities christened as “masala bond’ have offered 6.45% rate with three and a half year maturity. Fund managers, banks, insurers and pension funds across North America, Asia and Europe have invested in those debt securities.

“…we anticipate even greater momentum following the Reserve Bank of India’s approval for Indian corporates to issue Masala debt,” said IFC Vice President and Treasurer Jingdong Hua. “Just today Indian Railways Finance Corporation said it plans to raise $1 billion in the offshore rupee markets. IFC stands ready to support first-time Masala bond issuers.”

These bonds mark the first issuance at this tenor in the offshore rupee markets. They build on previous IFC Masala bond issuances of three, five, seven and ten-year maturities, adding further depth to the offshore rupee yield curve for triple-A issuers, IFC said in a release.

The issuance brings IFC’s overall Masala bond issuances to Rs 9,900 crore, or approximately $1.6 billion dollars. IFC has also issued in the onshore rupee markets, raising Rs 600 crore in Maharaja bonds.

The IFC Masala bonds are listed on the London Stock Exchange. Proceeds of the bonds will support private sector investment in India.