HDFC dishes up first Masala bond by India issuer

India's largest mortgage lender pays up to ensure Masala bond market finally gets off the ground.
Unlocking a new market?
Unlocking a new market?

India's largest mortgage lender, Housing Development Finance Corp HDFC issued the first Masala bond by an Indian company on Thursday, opening up a new fundraising avenue for domestic borrowers.

The offshore rupee-denominated market has been very long on promise but short on delivery ever since the government finalised a framework agreement for domestic issuers last September.

Over the past eight to nine months a number of companies have roadshowed potential transactions that subsequently failed to materialise because offshore investors demanded a yield pick-up over domestic comparables to compensate for a likely lack of secondary market liquidity. 

Underlying this, there have also been currency...

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