Exim Bank on Monday raised $500 million in an overseas bond sale programme in a 5.5-year money that was oversubscribed by over six-times and priced at a yield of 3.96 per cent, according two merchant bankers.
The bank has given an initial pricing of US treasury plus 245 bps but due to high demand the final pricing was set at five-year treasury plus 220 bps, thus witnessing a 25 bps tightening in the final pricing, offering an effective yield of 3.96 per cent, said a merchant banker.
The RegS (Regulation S) issue carries a Baa3 rating by Moody's and BBB- by S&P. Regulation S bonds are senior unsecured debt instruments sold to foreign investors in which US-based American investors cannot participate.
During the current fiscal, Exim has already raised $ 650 million in overseas bond offerings from the Australian, Singapore and Japanese (Uridashi) bond markets.
The state-run export finance agency could not be contacted immediately.
By geography, 62 per cent were Asia-based investors, 23 per cent from Europe and the rest offshore US investors.
While 60 per cent of the issue was lapped up by fund managers, 20 per cent was allotted to banks, 9 per cent picked by central banks, pensions and sovereign wealth funds, 6 per cent by insurers and 5 per cent by private lenders.
"The issue was oversubscribed by over six times (over $3 billion) and saw participation from very high quality global investors," Neville Fernandes, head of debt capital markets at Citi India, one of book-runners said.
Last week, IDBI Bank had raised $300 million via an overseas bond sale in a 5.5-year money, priced at 5.061 per cent. For the city-based lender this was first issue since last March when it had raised $500 million.
Earlier this month, telecom major Bharti raised $400 million or 350 million Swiss francs from the Swiss market in a six-year money. This was Bharti's second bond sale this year after it had raised 250 million euros in January in the run-up to spectrum auctions.
After a bond sale last year worth $16 billion, up 60 per cent from 2012, Indian companies have been going slow on tapping global market due to rising interest rates there.
The overseas fund raising ebbed after the May tapering talk by US Fed which spiked interest rates in Western markets.
Since then there were only a few issues, including HDFC Bank ($500 million) and ICICI Bank ($750 million).