World Bank’s finance arm rolls out offshore rupee bonds for Rs 1,600 crore

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

Fund managers, banks, insurers and pension funds across North America, Asia and Europe have invested in these debt securities christened as ‘Masala bonds’, IFC has said. The securities have offered 6.45% rate with three-and-ahalf-year maturity.

“We anticipate even greater momentum following the Reserve Bank of India’s approval for Indian corporates to issue Masala debt,” said Jingdong Hua, vicepresident and treasurer at IFC.

“Just today (Friday), 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,” he said.

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. The issuance brings IFC’s overall Masala bond issuances to Rs 9,900 crore, or approximately $1.6 billion.

IFC has also issued in the onshore rupee markets, raising Rs 600 crore in Maharaja bonds.

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