NaBFID plans to raise $1.5 billion via overseas bonds
NaBFID is set to initiate the raising of $500 million via a 10-year overseas bond, while simultaneously negotiating a $1 billion MIGA-backed bond with a longer 15-year maturity. This financial strategy aims to secure essential long-term funding for infrastructure developments.
Mumbai: The National Bank for Financing Infrastructure and Development (NaBFID) aims to secure $1.5 billion through overseas bonds, with plans to raise $500 million via a 10-year bond and another $1 billion through a 15-year bond backed by the Multilateral Investment Guarantee Agency (MIGA). NaBFID is targeting $4 billion in dollar funding by December through a combination of loans and bonds, including the recent $500 million bond issuance and external commercial borrowings.
The bank leveraged the Reserve Bank of India's concessional US dollar-rupee swap facility, which offers a low-cost swap of 1.5% per year for eligible external commercial borrowings, to minimize hedging expenses for overseas funding. However, the advantage of overseas borrowing has diminished as US Treasury yields have risen, making dollar borrowing costs nearly equivalent to domestic bond market rates.
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