Exim Bank raises $500M via overseas bond sale

Exim Bank raises $500M via overseas bond sale

Export-Import Bank of India (Exim Bank) on Monday raised $500 million via a dollar-denominated Regulation S (Reg S) bonds sale to investors in Asia and Europe.

The sale of Reg S bonds, which are offered to non-U. S. residents and qualified institutional investors under an exception to U. S. securities laws enacted in 1990, took place under Exim Bank's $6 billion medium term note (MTN) programme. It may be noted here that Reg S bonds don't enjoy the same legal protection as other bond issues.

The bonds have been priced at U. S. Treasury plus 220 basis points, with maturity tenure of 5.5 years.

Global ratings agency Moody's has Baa3 rating for the Exim Bank. It incorporates two-notch uplift because of Moody's assumption that the bank enjoys high support from the government.

Moody's said in a statement, "The assumption is based on EXIM India's strong relationship with the government . its quasi-sovereign status, the government's full ownership of the bank, and the bank's clear policy role as an export credit agency."

Its most recent bond issue was supported by a very strong order book oversubscribed by over six times. An issue arranger said very high quality foreign investors participated in the issue.

In the three months through June last year, seven Indian companies sold dollar-denominated bonds with a total value of $4.05 billion. Another sale of more than $200 million by Exim Bank later this quarter will make it the busiest quarter in terms of volumes since that period.

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