The Export-Import Bank of India (EximBank), on Wednesday, said its five-year ‘Reg-S’ bond issue of $500 million received an oversubscriptionof more than 3.4 times from 117 investors.
The issue was priced at current (US) treasury bond five-year (CT5) plus 140 basis points (bps) against the initial price guidance of CT5 plus 165 bps, representing an interest compression of 25 bps. One basis point equals one-hundredth of a percentage point.
EximBank, which promotes India’s international trade and investment, will be using the funds to support Indian project exports, overseas investment by way of long-term credit and its lines of credit portfolio.
David Rasquinha, Managing Director, EximBank, said: “The swift build to the book and the large book size, even after significant tightening by 25 bps, demonstrates strong confidence of overseas investors in the India story and in EximBank. The deal offers seasoned and savvyinvestors strong credit quality in the steadily growing Indian economy.”
EximBank of India has been rated ‘Baa2 (Stable)’ by Moody’s and ‘BBB- (Stable)’ by Fitch, same as the rating of the Government of India.
Debasish Mallick, Deputy Managing Director, observed that the bank issued a fixed rate Reg-S only bond after a gap of three years.
The quasi-sovereign nature of the bankand EMBIG (Emerging Market Bond Index Global) index eligibility of the bonds helped in the tightening (compression of coupon rate), while also re-pricing the curve for Indian papers, he added. In terms of geographic distribution, the bonds were distributed 87 per cent in Asia and 13 per cent in Europe and offshore US, EximBank said in a statement.
Investor distribution
In terms of investor distribution, the bonds were distributed to high-quality fixed income accounts, witharound 44 per cent distributed to fund and asset managers, 29 per cent to banks, and 20 per cent to insurance and sovereign wealth funds, and 7 per cent to private banks.
HSBC Bank and Standard Chartered Bank acted as joint lead managers and book-runners for the offering, the statement said.