HDFC breaks new ground with record convertible

$500 million deal promises slew of imitators from Indian financial services sector.

HDFC, the leading housing lender in India, broke new ground yesterday with a two times subscribed convertible bond. The $500 million issue was significant in two key respects. First, it was the largest convertible bond ever from India - beating a Tata Motors issue from April 2004 - and was likewise the largest Asian convertible bond to date in 2005 - beating a $475 million issue by LG Philips. Second, it was the first convertible bond from India's financial sector following regulatory changes by the Reserve Bank of India this month.

Thanks to these regulatory changes market participants now forecast that three to four other financial institutions will follow HDFC...

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