THE Asian Development Bank (ADB) has raised 8.5 billion rupees (US$118 million) from a new issue of offshore Indian rupee-linked 10-year bonds. This represents ADB’s first new maturity raised in Indian rupees since 2017 and contributes to an established yield curve, which stretches from 2021 through 2030 with 72.4 billion rupees worth of outstanding bonds.

ADB treasurer Pierre Van Peteghem says the bank’s India rupee bonds have been a game changer for local currency operations. “Through issues like this, ADB contributes to capital market development, attracts foreign portfolio investment, and catalyzes the financing of new ADB loans and investments in Indian rupees,” he points out. “On this occasion, we are also supporting the development of financial market infrastructure by listing the bonds on India International Exchange.”

The issue, announced on February 25, sets a new benchmark in the 10-year offshore rupee market, with the bonds bearing a semi-annual coupon of 6.15% and priced to yield 6.19%. The bonds, which are denominated in Indian rupees but settled in US dollars, were underwritten by J.P. Morgan and primarily distributed to investors in Europe (79%) and the Americas (21%). By type of investors, 28% of the bonds were placed with banks and 72% with fund managers.

In a ground-breaking initiative, ADB will dual list its bonds on the Global Securities Market of India International Exchange at GIFT IFSC and the Luxembourg Stock Exchange. Commenting on the listing, INDIA INX managing director and CEO V. Balasubramaniam says this is the first time a foreign issuer is doing a primary listing with India International Exchange.

ADB is a regular borrower in the mainstream international bond markets, but has also led issuances in developing Asian countries as part of its efforts to promote local currency bond markets as an alternative to bank lending. In 2019, ADB issued local currency bonds in Georgian lari, Indian rupee, Indonesian rupiah, Kazakhstan tenge and Philippine peso.