Exim Bank’s $ 1bn bonds sold in 3 hrs

With a $1-billion fund-raise by issuing 10-year bonds, Exim Bank has raised the first foreign borrowing of  2021. The bank, which is rated on a par with the government, managed to raise funds at 2.25 per cent- a record low.

Exim’s bond issue was launched early morning in eastern markets (Hong Kong and Singapore) and within three hours was over-subscribed twice. The bank then tightened the initial price guidance by 40 basis points (100bps = 1 percentage point). At close, with US investors also coming in, the issue was oversubscribed by more than 3.5 times. Several high-quality issuers had to settle for less than their requested allocations.

In terms of geographic distribution, the bonds were distributed 55 per cent in Asia, 29 per cent in the US and 16 per cent from the EMEA (Europe, Middle East & Africa) region.

In terms of distribution, the bonds were picked up by high-quality investors with around 68 per cent going to fund managers, 17 per cent to sovereign wealth funds, central banks & insurance companies, 14 per cent to banks and
1 per cent to private banks and others.

On the said endeavour, Exim Bank MD David Rasquinha said that the institution has a large pipeline of projects that it funds, the largest of which is a $1.6-billion loan for a power project in Bangladesh. “Unlike banks, we provide only medium to long-term financing because we do not have access to short-term funds. Our loans range from three years to 20 years,” he added. He added that short-term export trends do not impact the business of Exim.