ADB raises $74m from rupee-linked bond sale

28 Jul 16

The Asian Development Bank has raised around $74m from the issuance of five-year, offshore Indian rupee-linked bonds.

The bank launched a $500m offshore rupee-linked bond programme in 2014 in efforts to help promote the country’s bond market. Today’s transaction is the ADB’s third issuance in the offshore Indian rupee-linked market, and the second Indian rupee issue this year.

India has been looking to promote its bond market in hopes of supporting Indian companies in taking on more debt, investing and creating jobs. However, efforts to mimic the success of China’s yuan-denominated bond programme have not seen a large payoff so far.

But ADB treasurer Pierre van Petegham claimed the “strength of the Indian economy has led to increasing demands from international investors for Indian rupee-linked bonds”.

“Today’s transaction, with the longest maturity and the largest size of any previous ADB rupee bonds, demonstrates the underlying investor interest in India and the ADB’s commitment to help develop the country’s capital markets,” he said.

Proceeds from the bond will be used to support private sector lending in India.

The ADB has led issuance in developing Asian countries in a push to promote domestic bond markets as an alternative to bank lending. It plans to raise around $20bn overall from capital markets in 2016.

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