Exim Bank of India widens investor base with euro-yen issue

The transaction prices at the tight end of guidance against a backdrop of an oversupply of Indian paper.
Barclays Capital and Nikko Citigroup led Export-Import Bank of India through a Ñ24 billion Reg-S, Baa3/BBB-/BBB (Moody's/S&P/JCR) rated, five-year bond last night. The deal priced at par at 50bp over three-month yen Libor (51.5bp over dollar Libor), and attracting an order book of Ñ30 billion.

By issuing in yen, Exim Bank achieved a tighter price than it would have by issuing in dollars, and was able to take advantage of savings on the coupon withholding tax.

A total of 18 investors participated in the deal, with bookrunners allocating 15% of the bonds to Europe, 20% to Hong Kong, 40% to Japan, 5% to Korea and 20% to Singapore. Funds and asset managers bought 38%, banks 57% and other accounts 5%.

Bookrunners initially announced guidance at 51bp-54bp over yen Libor, revised it to 51bp and finally priced at 50bp. In terms of comparables, bankers quoted SBIÆs 2012s at 50bp over yen Libor, while SBI's and Exim's five-year CDSs currently stand at 44/47 and 47/50 over yen Libor respectively.

The transaction is EximÆs first euro-yen deal, and the bankÆs first benchmark public deal under its MTN programme. It is, according to bankers, the largest public euro-yen deal from an Indian issuer. Other Indian euro-yen offerings include Reliance IndustriesÆ Ñ17.5 million 10-year bond (2.86%) issued in March 2006 via joint bookrunners ABN AMRO, Deutsche Bank and Nikko Citigroup; and Indian Railways Finance CorporationÆs Ñ13 billion five-year issue (1.43%) in 2005 booked by ABN AMRO, Daiwa Securities SMBC and UBS. The State Bank of India also priced a Ñ15 billion transaction in 1988.

There was no formal roadshow for Exim's latest deal.

Exim Bank of India was set up by an Act of Parliament in 1981 and is wholl owned by the Indian Government. The bank aims to provide financial assistance to exporters and importers.
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