IL&FS unit plans investor meet next week for China funds: sources

MUMBAI Fri Apr 13, 2012 11:31am IST

Related Topics

Stocks

   

MUMBAI (Reuters) - A unit of India's IL&FS Transportation Networks Ltd is looking to raise up to $200 million worth of yuan-denominated bonds, two sources close to the deal said on Friday, which would be the second dim sum bond offering by an Indian company.

ITNL Offshore Pte Ltd is set to start road shows for the sale in Singapore on Monday, and in Hong the following day, the sources said.

RBS (RBS.L), Deutsche Bank (DBKGn.DE) and UBS (UBSN.VX) are the underwriters for the deal, they said.

ITNL Offshore, a Singapore based unit of IL&FS Transportation, is likely to borrow in the three or five years maturity buckets depending on investor response, said the source. It was not immediately clear what the proceeds would be used for.

The bonds are unconditionally and irrevocably guaranteed by the Export-Import Bank of India, a source said.

Bankers for the renminbi-denominated bonds were picked last August but preparing the documents and getting an EXIM guarantee took time, the source said.

The bonds are expected to be rated BBB- from Fitch, the source, and are proposed to be listed on the Hong Kong Stock Exchange.

Steep increases in rupee interest rates, with 13 rate hikes since 2010, have steered Indian companies to raise funds overseas.

IDBI Bank (IDBI.NS) was the first Indian company to tap the dim sum bond last November.

The yuan's attractiveness has received a boost after New Delhi added the Chinese currency as a external financing vehicle to the U.S. dollar, Japanese yen, euro and the pound sterling in September.

India has set a $1 billion limit for borrowing in yuan within the $30 billion overseas borrowing limit for companies.

Many foreign corporate borrowers, including the World Bank, Volkswagen (VOWG_p.DE), McDonald's Corp (MCD.N) and Caterpillar (CAT.N), have tapped the CNH market for funds for their Chinese operations, rather than borrowing in the dollar markets and converting into Chinese currency, which can be costlier.

As of this week, 42.49 billion yuan worth of dim sum bonds have been issued in 2012, according to Thomson Reuters data, compared with 17.64 billion yuan worth in the first three months of last year.

Growth in the offshore renminbi, or yuan, bond market has been driven by a near-consensus market view that the yuan will rise, which has enabled top-rated issuers to pay less than 1 percent interest on their offerings.

(Writing by Rafael Nam; Editing by Ranjit Gangadharan)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Cook Comes Out

Cook Comes Out

Apple's Cook: "I'm proud to be gay"  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage