Exim Bank hits global bond markets with $1-billion issue

The Exim Bank is in the international debt markets with a USD 1-billion issue under its USD 3-billion medium-term note programme for the current fiscal year.

The Exim Bank has opened the five-year US dollar bond sale progamme in the key international markets on Monday morning and is likely to be closed by the end of the day, a merchant banking source told PTI without sharing more details like the pricing and tenor of the issue.

EXIM Bank confirmed that it is in the market but did not divulge specific details about the issue.

It can be noted that the Exim Bank sources almost 90 per cent of its lendable resources from foreign markets by selling debt.

In August, the bank had hit the Samurai bonds market and had mopped up 32 billion yen in a three and five-year money offerings. Samurai bonds are yen-denominated debt issued by foreign governments, agencies or companies in Japan.

In May last year, managing director David Rasquinha had said the bank would begin to scout the markets from July to raise up to USD 3 billion in overseas debt this fiscal.

But the same has not moved forward as the global economy has been falling and so has been the domestic economy, roiling both project finance exports and imports.

The bank has a USD 10-billion global medium-term note programme till 2024, of which it had drawn down USD 6.5 billion till FY19, Rasquinha had said, adding this included foreign debt worth USD 1.22 billion raised through a variety of instruments through FY19.

Meanwhile, international rating agency Fitch assigned BBB- rating to the USD 1 billion issue that is currently underway in the global markets with a stable outlook.

The proposed senior unsecured notes will constitute Exim Bank’s direct, unconditional, unsubordinated and unsecured obligations and will at all times rank pari passu among themselves and with all of its Exim other unsubordinated and unsecured obligations, Fitch said in a note on Monday.

It can be noted that the government had injected Rs 5,000 crore in fresh equity into the bank in FY19 and has approved doubling its authorised capital to Rs 20,000 crore. An additional Rs 1,500 crore of fresh equity will be infused over the course of FY20.

The bank reported net profit of Rs 82 crore in FY19, after a net loss of Rs 2,924 crore in FY18. Its loan portfolio fell to Rs 93,617 crore from Rs 107,532 crore the previous year.