NaBFID has raised $750 million in its first US dollar bond, marking a pivotal move in diversifying India’s infrastructure funding sources and opening the door to increased international investor participation.
NaBFID has raised $750 million in its first US dollar bond sale, marking a significant step in the state-backed infrastructure lender’s plan to tap offshore markets more regularly. The 10-year benchmark bond was priced at 105 basis points above US Treasuries, translating into a coupon of 6.122 per cent, according to the company’s announcement and market reports.
The notes form the first draw under NaBFID’s $4 billion global medium-term note programme and are listed on the India International Exchange and the NSE International Exchange at GIFT City. CareEdge has rated the bond BBB+, and the issue is expected to be eligible for inclusion in widely followed emerging-market debt indices, including the EMBI and JACI, which could help broaden secondary-market interest.
Demand was heavily international, with US investors accounting for 55 per cent of the order book, followed by the Europe, Middle East and Africa region at 30 per cent and Asia at 15 per cent. Reuters-style reporting from market sources suggested the deal drew more than $2 billion in bids, allowing NaBFID to tighten pricing from earlier guidance of 130 basis points. The wider access to American buyers followed the lender’s switch to a GMTN structure, which opened the deal to US participation.
NaBFID managing director Rajkiran Rai G. said the response reflected confidence in the institution’s credit profile, its mandate and India’s long-term infrastructure prospects. Chief financial officer Monika Kalia said the transaction would serve as an important reference point for future foreign-currency fundraising. The lender, which has said it needs $10 billion to $20 billion a year for infrastructure finance, is seeking to diversify beyond domestic markets, with earlier borrowings including external commercial borrowing and a dollar loan this year. The principal currency risk on the bond has been fully hedged through a five-year swap arranged with the Reserve Bank of India, while the fixed coupon gives NaBFID certainty over funding costs for the life of the issue.
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