Innovative Masala Bond for India launched in Japan

Innovative Masala Bond for India was launched by IFC in Japan

March 2, 2016

Innovative Masala Bond for India was launched by IFC in Japan

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]F[/dropcap]irst Uridashi Masala Bond was launched by IFC, a member of the World Bank Group, to promote private sector development in India mobilized Rs. 300 million ($4.3 million) from Japanese household investors.

IFC said in announcement from Tokyo on Tuesday, the equivalent of $1.7 billion from international investors for investment in India which was raised by the three-year bond builds on IFC’s pioneering Masala bond programme.
Uridashi bonds are sold to Japanese household investors and Masala bonds are sold to offshore investors which are rupee-denominated instruments.

To support private sector investment in India, proceeds will be used from IFC’s Uridashi Masala bonds.
IFC vice president and Treasurer Jingdong Hua said “Thriving economies depend on efficient capital markets,”

“IFC’s latest bond opens up a new source of local-currency finance for businesses in India while enabling Japanese household investors to participate in the development of one of the world’s fastest-growing economies.”

[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]I[/dropcap]FC said it has played a prominent role in India’s capital-markets development, rolling out a $3 billion rupee-denominated Masala bond programme over the past two years.

IFC has issued bonds in a sufficient range of maturities to establish a sound benchmark for rupee bond prices, it said.

The resulting investor demand for rupee bonds prompted the Indian central bank to consider permitting local companies to issue rupee-denominated bonds in offshore markets.

J.P. Morgan is the sole arranger of the bonds. Daisen Hinomaru Securities Co. Ltd is the distributor of the bonds.

IFC said India is its largest client country. IFC’s committed portfolio in India totalled more than $5 billion as of June 30, 2015. In fiscal year 2015, IFC committed $1.4 billion in new investments.

In addition to strengthening local capital markets in India, IFC is focused on boosting financing in infrastructure and logistics, promoting financial inclusion, and expanding access to high-quality and affordable healthcare, it said.