IFC completes issuance of $1 billion in Global Rupee Bonds

The program was launched last October to strengthen India’s capital markets and attract greater foreign investment.

The seven-year IFC bond offering is the longest-dated issue to date in the offshore rupee markets, and was 140 percent oversubscribed. Most of the investors were from outside Asia.The bond yields 8.25 percent.

Under the IFC global rupee bond program, IFC has also issued three-year bonds totaling 30 billion rupees, and five-year bonds totaling 20 billion rupees.

“The very strong market response to IFC’s first global rupee bond program highlights the growing confidence of international investors in India’s economy,” said IFC EVP and CEO Jin-Yong Cai. 

 

“By offering a range of tenors under the program, we were able to attract a broad range of investors from around the world, bringing depth and diversity to the offshore rupee market," Cai said.

Arvind Mayaram, Secretary of Economic Affairs in India’s Ministry of Finance, said: “IFC is a key partner in supporting the development of the private sector in India. With the global rupee bond program, IFC made an important contribution to the development of India’s capital markets, attracting foreign investment at this important juncture andestablishing an Indian rupee benchmark in the global markets."

IFC global rupee bonds are denominated in Indian rupees but settled in U.S. dollars, with all principal and coupon payments tied to the dollar-rupee exchange rate. IFC converts bond that proceeds from dollars into rupees on the domestic spot exchange market, and invests the rupees in the country.

Over the years, IFC has issued bonds in 14 emerging market local currencies, including the Brazilian real, the Chinese renminbi, the Nigeria naira, and the Russia ruble. 

 

Often, IFC is the first international or corporate issuer of local-currency bonds in a market. 

 

When issuing local-currency bonds, IFC works closely with regulators and market participants to refine the regulatory framework, encouraging greater participation in the local markets and providing a model for other international issuers.

India accounted for $4.5 billion of IFC’s committed investment portfolio as of June 30, 2013—more than any other country. In FY13, IFC invested $1.38 billion in India to achieve several strategic priorities such as promoting inclusive growth in India’s low-income states, addressing climate change, and supporting global economic integration.