Yes Bank Ltd’s board on Wednesday approved the setting up of a $1 billion medium-term note (MTN) programme, enabling the bank to raise funds in one or more tranches, an exchange filing by the lender showed.
Under the MTN programme banks can sell debt securities, usually maturing between 5 and 10 years, in the overseas market and secure cheaper funding, according to analysts.
Yes Bank is among the many Indian lenders that have tapped the overseas market for funds, including borrowings from commercial banks and multilateral agencies.
Earlier this month, Yes Bank raised a total of $400 million through two syndicated loan transactions in Japan and Taiwan.
“With these syndications Yes Bank has also demonstrated its ability to leverage new geographies and currencies to fund the bank’s expanding franchise at Yes Bank’s International Business Unit (IBU) at GIFT City (Gujarat International Finance Tec-City),” the bank said in release dated 21 November.
Banks with branches in GIFT City, a global financial hub, have the option to sell foreign currency bonds and provide for the foreign currency requirements of Indian companies through syndicated loans, trade finance, and buyers’ credit, among others.
Appetite for Indian debt papers revived in the overseas market after Moody’s Investors Service on 16 November raised India’s sovereign bond rating by one notch to Baa2 for the first time in 14 years.
Following the sovereign rating upgrade, Reliance Industries Ltd raised $800 million by selling 10-year bonds overseas at the lowest coupon rate for an Indian corporate bond sale of that maturity.
Source: Mint