(Indian Express) Firms likely to raise $6 bn via ‘Masala’ bonds in FY16

Firms likely to raise $6 bn via ‘Masala’ bonds in FY16.

• Leading corporate houses are likely to issue rupee-denominated offshore bonds AKA Masala Bonds worth $6 billion this year and double it to $12 billion next fiscal, says an SBI Research report.
• IF RAISED, this will be one-fifth of the annual external commercial borrowings that domestic companies raise annually, which is hovering around $30-33 billion in the past three years.
• $30 billion – Expected to be raised by domestic corporates in ECBs this fiscal, while their Masala Bond issuances  are likely to be $6 billion.
• INDIAN RAILWAY Finance has  approval to raise $1 bn via this route.
• 1,000 CRORE:  The value of IFC’s 10-year rupee-bond issued in 2014 to raise foreign investment.
• $12 billion – Bond issuances likely in the next fiscal by Indian firms.
• MASALA BONDS : are rupee-denominated debt instruments issued in offshore markets to investors but settled in dollars and, therefore, the currency risk resides with investors. Such bonds offer firms options to blend their portfolio to optimise the liability and minimise the cost.
• THE RESERVE Bank of India in its monetary policy announcement on April 7 had said it would allow domestic corporates to issue offshore rupee bonds but final guidelines are awaited.

Art. Ref. : Firms May Raise $6 Bn via ‘Masala’ Bonds in FY16 – http://profit.ndtv.com/news/bonds/article-firms-may-raise-6-bn-via-masala-bonds-in-fy16-report-760201