Top Masala Bond seller returns to market after govt relaxes tax norms

The market for masala notes, which are rupee securities sold abroad, may draw issuers at a time when liquidity is tight domestically

India’s biggest issuer of offshore rupee bonds sold the first masala note by a local company in half a year, after the government relaxed taxation on overseas borrowings and the Indian currency rebounded in recent weeks.

Housing Development Finance Corp. raised five billion rupees ($70 million) via a sale of five-year 8.75 percent notes, it said in an exchange filing. That was higher than the coupon of 6.73 percent the nation’s largest mortgage lender offered when it previously sold masala debt a year ago.

The firm is returning to the market after India’s Ministry of Finance withdrew tax payable on offshore rupee