New Delhi: Kerala Infrastructure Investment Fund Board (KIIFB), a state government agency, Friday said it has raised Rs 2,150 crore through its debut masala bond issue.
This is not just the first offshore capital market issuance from a state-level entity from India ever, but also the largest dual currency issue by a sub-sovereign backed entity from entire emerging markets and Asia, KIIF said in a statement.
The transaction was priced on March 26, 2019 and saw strong participation from a wide spectrum of investors which included asset managers, insurance companies, pension funds, banks as well as private wealth managers, it said.
The masala bond market till date had seen issuance only from large Indian corporates and public institutions like NHAI and NTPC which are all rated AAA in the domestic market.
“The successful closing of this deal is significant from this point of view and opens up new avenues for KIIFB. The deal is also significant for the state as the international investors have shown faith in a credit backed by a sub-sovereign from the emerging markets for the first time,” it said.
“This landmark deal, the first by a sub-sovereign from the emerging markets, has shown the acceptability among international investors, the controlled leverage model of infrastructure financing championed by this government through KIIFB.
“This issue has also helped to showcase the unique strengths of Kerala in front of a wider global audience and help garner international investments to the state,” KIIFB CEO K M Abraham said.
KIIFB Deputy Managing Director and Kerala Principal Secretary (Finance) Sanjeev Kaushik said, “This transaction has realised our objective of diversifying our sources of funding by accessing capital from international investors. KIIFB strives to be at the forefront of creating a sustainable development model for infrastructure financing in the emerging markets and an exemplar for best practices in corporate governance and fund management.”