Exim Bank raises $1 billion via 10-year bonds

Export Import Bank of India (EXIM) Bank has broken the international bond drought from India by raising $1 billion from investors across the globe.

The government of India-backed development finance institution garnered an order book of $3.6 billion to raise 10 year money at 190 basis points above the 10- year US treasury, people familiar with the issue said. One basis point is 0.01 percentage point. It has chosen to keep $1 billion of this amount, they said.

The effective yield that Exim pays on the bond comes to about 5.50% given that the 10 year benchmark US treasury is trading at about 3.60%.

“The issue is the first one from India since March 2022 so in a way a landmark. Interest rates have risen across the board with the US Federal Reserve on a rate hiking spree which has made fundraising for entities from the emerging markets much more expensive,” said a person familiar with the issue.

The Exim bond was priced at a tighter rate than the guidance of 220 basis points above the US treasury which bankers had given earlier in the day.

Source : economictimes.indiatimes.com/ For more details

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