Exim Bank raises $1 bn via overseas bonds at 3.375% coupon

Export-Import Bank of India (Exim Bank) on Sunday said it has raised $1 billion through an issue of 10-year bonds, at a coupon rate of 3.375 per cent, the lowest rate since 2000.

Exim Bank proposes to use the funds to support Indian project exports, overseas investments by way of long-term credit and its lines of credit portfolio.

The bond issue attracted a total order book in excess of $2.50 billion, ie, 2.5 times the issue size, with subscription offer from over 157 investors.

Exim said the original size of the bond issue of $500 million has been doubled to $1 billion considering the strong demand from the investors.

''The Bank is the closest proxy to sovereign in the international markets and the 10-year issuance was based on investors' feedback, so that benchmark 10-year curve out of India could be established. The issuance will help in better price discovery for other issuers from India seeking longer tenor funds from the international debt capital market,'' Yaduvendra Mathur, chairman and managing director of Exim Bank, said.

According to David Rasquinha, deputy managing director, this is the first time the bank has tapped the deep and wide 144A market and the bond was very well received by investors with a book that was over two times oversubscribed.

In terms of geographic distribution, the bonds were distributed 61 per cent in the US, 20 per cent in Asia and 19 per cent in Europe

US institutional investor allocation of 61 per cent was the highest-ever for any bank/FI out of India, Exim Bank said.

Exim Bank, which is a government-owned export finance institution, had commenced operations in 1982 under the Export-Import Bank of India Act 1981.

Government of India launched the institution with a mandate to not just enhance exports from India, but also to integrate the country's foreign trade and investment with the overall economic growth.