IFC raises $112M in fourth tranche of $1B rupee-denominated bond

International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, has raised an additional Rs 700 crore ($112 million) as the fourth tranche of its global rupee-denominated bonds which seeks to generate around $1 billion.

The new tranche of its three-year bonds was lapped up by asset managers and banks from the US and Europe, it said on Friday.

With the new tranche, IFC has managed to issue bonds worth Rs 3,000 crore (around $500 million) or half of the target size to date. Last October, IFC had launched a $1 billion offshore bond programme denominated in Indian currency to increase foreign investments and fund private projects in the country.

It had raised Rs 1,000 crore in the first tranche last November and doubled with another Rs 1,000 crore worth of bonds early last month. In the last week of January it cooped another Rs 300 crore.

“Investors continue to show strong demand for global rupee bonds, despite the volatility in emerging-market currencies and the recent interest-rate increase in India,” said Monish Mahurkar, IFC Director for Treasury Client Solutions.

JP Morgan acted as lead managers for the latest issuance.

IFC global rupee bonds are denominated in Indian rupee but settled in US dollar, with all principal and coupon payments made in the US currency. IFC converts bond proceeds from dollars into rupees on the domestic spot exchange market, and uses the rupees to invest in the country.

Over the years, IFC has issued bonds in 14 local currencies, including the Brazilian real, the Chinese renminbi, the Nigeria naira and the Russia ruble. IFC is often the first international or corporate issuer of local-currency bonds in a market.

India accounted for $4.5 billion of IFC’s committed investment portfolio as of June 30, 2013—more than any other country. In FY13, IFC invested $1.38 billion in India.

(Edited by Joby Puthuparampil Johnson)

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