IFC issues Rs 170 cr 'Masala Bonds'

IFC, a member of the World Bank Group, has issued a 1.7 billion worth of rupee-denominated bond (about USD 25 million) as support to Indian companies which are preparing to issue such 'Masala bonds' in offshore markets.
"Over the past two years, IFC's Masala Bond programme has played an important role in deepening India's capital markets, prompting the RBI to authorise Indian companies to issue similar bonds in offshore markets," IFC said in a statement.
International Finance Corporation's latest issuance raised a total of Rs 1.7 billion (about Rs 170 crore) in four-year Masala bonds - all were purchased by KBC Asset Management, a European fund manager. The yield on the bonds was 6.5 per cent.

IFC said it is supporting Indian companies seeking to issue Masala bonds by providing advice and sharing its experience as a pioneer issuer in this market.
The latest bond marks a further step in IFC's efforts since bond proceeds will be used to invest in forthcoming Masala bonds by Indian companies, the release said.
"Investors have shown strong demand for global rupee bonds, despite the volatility in emerging-market currencies.

"We have seen even greater momentum following the Reserve Bank of India's recent approval for Indian corporations to issue Masala debt. IFC will continue to support India's capital market development and help bring international investors to India," said IFC Vice President and Treasurer Jingdong Hua.

In all, IFC has issued the equivalent of USD 1.7 billion in Masala bonds over the past two years. Listed on the London Stock Exchange, the bonds are issued under IFC's USD 3 billion global rupee bond programme.
India is IFC's top country exposure, the release said. IFC's committed portfolio in India is over USD 5 billion as of June 30, 2015. In 2014-15, IFC committed USD 1.4 billion in new investments.
"We have been a longstanding supporter of IFC's Masala bond program as it offers us a simple mechanism for getting exposure to India, in a triple-A rated and increasingly liquid format," said Bob Maes, Head of Fixed Income Emerging Markets at KBC Asset Management SA.