Manappuram Finance, Exim Bank raise $1.3 billion through bond sales

Exim Bank and Manappuram Finance have kick started India Inc’s dollar-funding spree in the new year, cumulatively raising $1.3 billion through separate issues as bankers build on the momentum after a record 2019.

Exim Bank raised $1 billion through the sale of 10-year bonds to global investors and Manappuram Finance raised about $300 million through a three-year bond sale in its debut issue of such instruments.

Exim, which is a regular in the market, priced its issue at 150 basis points above the 10-year US treasury, tighter than the initial guidance of 175 basis points above the 10-year US treasury. The 10-year US treasury was trading at 1.77 per cent and the bond was priced at 3.27 per cent. One basis point is 0.01 percentage point.

“This is the first 10-year tranche issue from Exim since 2018 and pricing of the issue is the lowest 10-year for the bank which is a regular in the market. Exim enjoys the highest rating and investors around the world are ready to put in money for such credit out of India,” said a person familiar with the deal. The bank managed to collect $3.5 billion from investors out of which it retained $1 billion.

Manappuram raised $300 million at 5.90 per cent in their debut dollar bond sale with investors committing more than $1 billion enabling bankers to price the issue tighter than the 6.25 per cent initial price guidance. Exim and Manappuram will be followed by more such issues out of India starting from Shriram Transport Finance’s $500 million sale as soon as this week.

Future Retail’s debut $500-million issue and Lalitpur Power’s debut $300 million sale is also likely later this month which means India Inc could raise more than $2.5 billion at least in the next couple of weeks.