MANILA, PHILIPPINES – The Asian Development Bank (ADB) has raised Rs3 billion (about $50 million) from its maiden issuance of offshore Indian rupee-linked bonds. This issuance is the first bond issued under ADB’s $500 million offshore rupee-linked bond program and aims to deepen India’s capital markets.
“There is clear demand for bonds linked to the Indian economy, Asia’s third largest, and the reception to ADB’s inaugural rupee-linked bond is reflective of this,” said Kazuki Fukunaga, ADB Deputy Treasurer. “ADB is committed to supporting development and poverty reduction in India through financing private sector projects such as those related to infrastructure and the financial sector and developing India’s capital markets.”
The bonds, which are denominated in Indian rupees but settled in US dollars, will have a coupon of 6.35% and will mature on 17 August 2016. The bond was sole-led by JP Morgan. 13% of the bonds were placed in Asia; 42% in Europe, Middle East, and Africa; and 46% in the Americas. By investor type, 10% of the bonds went to central banks, 39% to banks, and 51% to fund managers.
India is now ADB’s fourth largest shareholder and is its largest borrower, excluding cofinancing. Since the start of ADB lending operations to India in 1986, ADB has approved 210 loans amounting to $31.5 billion, $173.8 million for 10 grants, and $262 million for 348 technical assistance projects as of the end of 2013. Energy, and transport and information and communications technologies were the key sectors for assistance. During 2013, ADB approved $2.37 billion in public and private sector loans, technical assistance, and grants in India.
ADB plans to raise $12 billion to $13 billion from the bond markets in 2014.