Singapore sovereign wealth fund Temasek-owned Fullerton India Credit Company Ltd (FICCL) has raised Rs 500 crore through masala bonds to support business growth. This offering makes Fullerton the first foreign-owned company in India to issue rupee-denominated bonds overseas.
Fullerton India said it has priced the 37-month issue at fixed annual coupon of 8.12 per cent. Fullerton India Credit Company managing director Shantanu Mitra said in a statement,
This is a landmark transaction and enables Fullerton India to tap and develop a new source of funding. The issue matches our asset profile and finances our future growth plans
The company said it will use the proceeds for on-lending and other financing activities. It also said the issue will be listed on the Singapore Stock Exchange.Swiss investment bank Credit Suisse, which was the advisor to the deal, said the masala bond product remains attractive given the deep pool of liquidity available for borrowers.
Masala bonds are rupee-denominated debt instruments issued by domestic entities in overseas capital markets to raise specific fund requirements and bond investors bear the currency risk. Fullerton India will issue masala bonds of Rs 500 with a fixed annual coupon of 8.125 per cent and a tenor of 3 years and 1 month. Credit Suisse was the banker to the offering. Masala bonds are attractive given the deep pool of liquidity available for Indian borrowers, said Rajiv Baruah, head of India fixed income and CEO of Credit Suisse AG, Mumbai.
Arun Natarajan, head of strategy and business execution, FICCL, said the tenure of the bonds matched the maturity profile of asset portfolio. The finance company plans to raise more funds through masala bonds. Fullerton also plans to raise up to Rs 1,000 crore through debentures and subordinated debt from domestic market. ICRA has assigned a “AA+” rating, with stable outlook, to the NCDs and subordinated debt of FICCL.