Exim Bank withdraws planned 10-yr bond issuance over high yield demands

The bank had planned to raise Rs 2,500 crore through 10 year bonds. The base issue size was Rs 500 crore and the green shoe option was Rs 2,000 crore

Exim Bank on Wednesday withdrew its planned 10-year bond issuance as investors were demanding higher-than-expected yields for the issuance, according to multiple sources. The bank had planned to raise ₹2,500 crore through 10 year bonds.  The base issue size was ₹500 crore and the green shoe option was ₹2,000 crore. According to market insiders, Exim Bank expected tighter levels for their up to ₹2,500 crore issue since they are a very infrequent issuer in the  10-year segment. Additionally, sources indicated that Exim Bank received bids with a cut-off yield of 6.86 per cent for ₹1,655 crore, 6.87 per cent for ₹1,955 crore, and 6.88 per cent for ₹2,705 crore.

 

From the issuer point of view, these levels were slightly higher and also slightly higher than NTPC’s cut off, which raised Rs 4,000 crore at 6.84 per cent on Wednesday through 10 year bonds, sources said.

 

“Exim bank withdrew because of high levels. For the broader picture, even though the levels are the same today, there could be some impact moving forward on some issuances, however, it depends on how it goes,” said a market participant.

 

State-owned Exim Bank promotes, finances, and facilitates India's international trade. It offers financial assistance to exporters and importers, supporting them in identifying business opportunities, enhancing global competitiveness, and managing trade-related risks.