Aggressive pricing for Exim Bank's $1 bn debt hints at another robust year

Export Import Bank of India raised $1 billion via US dollar-denominated bonds on Thursday and investors said the aggressive pricing for the first such issuance in 2025 could mean yet another robust year for such papers.

Exim sold 10-year dollar-denominated bonds at 5.50 per cent, a spread of 100 basis points above the US Treasury yield and 30 bps below its initial guidance. It is the tightest yield spread ever for a 10-year issuance out of India, the lender said. 

Indian firms raised around $12.05 billion via dollar bonds last year, more than double the $5.70 billion raised in 2023, according to data from financial data aggregator Cbonds.

 

Shoaib Ahmed, director of ANZ's debt capital market team based in Singapore, expects dollar debt issuance to remain robust in 2025, driven by both lenders and non-banking finance companies (NBFCs) in the government and private sectors.

"We think issuance from NBFCs will be further influenced by the prevailing regulatory regime's impact on their fundraising options in addition to the all-in costs, which will naturally be impacted by how INR and USD rates evolve."

Last year, the Federal Reserve rate cut cycle was a positive factor, said Maksim Zenkov, deputy head of emerging markets fixed income at Cbonds.

"Better investor confidence about debt connected to India's growth story also played out favourably."

This year, ANZ's Ahmed said, elevated US yields could be a major factor but credit spreads continue to remain very attractive for Indian companies amidst strong investor appetite for issuers from the region.

Exim Bank said that half of the bonds were distributed in Asia, about a third in the Europe, Middle East and Africa (EMEA) region and 18 per cent in the US

The senior bonds will be rated Baa3, BBB- and BBB- by Moody's, S&P and Fitch Ratings, respectively, in line with the issuer rating.