IFC ups Global Rupee Bond issuance to support India’s capital markets

Wednesday, 29 January 2014 00:00 - - {{hitsCtrl.values.hits}}

IFC, a member of the World Bank Group, has increased by INR 3 billion (approximately $50 million) an outstanding three-year global Indian rupee bond to promote capital market development and encourage foreign investment in India. This is the second increase to the IFC global rupee bond, issued in November 2013 under the $1 billion IFC global rupee bond program. It brings the outstanding amount of the bond to INR 23 billion. Investors included asset managers and insurance companies in the U.S and Europe. IFC global rupee bonds are denominated in Indian rupee but settled in U.S. dollars, with all principal and coupon payments tied to the U.S. dollar-rupee exchange rate. IFC converts bond proceeds from dollars into rupees on the domestic spot exchange market, and uses the rupees to invest in the country. Over the years, IFC has issued bonds in 14 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. Bank of America-Merrill Lynch and HSBC acted as lead managers for the transaction.

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