Indian Railway Finance Corporation Ltd. Issues USD 750,000,000 bonds at a fixed rate of 2.80%

• Indian Railway Finance Corporation Limited priced its USD 750,000,000 bonds based on a Rule 144A / Regulation S offering format.
• This is under IRFC’s recently updated USD 4 billion global medium-term note program.
• The bonds achieved one of the tightest pricing by an Indian entity in recent times.

NEW DELHI: Indian Railway Finance Corporation Limited (the “Issuer” or “IRFC”) the dedicated market borrowing arm of the Indian Railways on 3rd February 2021 priced it’s USD 750,000,000 bonds based on a Rule 144A / Regulation S offering format under IRFC’s recently updated USD 4 billion global medium-term note program.

The bonds will be issued on 10th February 2021 for a tenor of 10 years at a fixed rate of 2.80%. The bonds carry semi-annual interest payments and bullet principal repayment.

Commenting on the issuance, Shri Amitabh Banerjee, Chairman and Managing Director, IRFC, said, “IRFC is a well-known name in the foreign bond issuance. The amount is a part of our USD 4 billion global term note program. We will be looking to raise the rest of the amount by the end of this fiscal. Our credit ratings are similar to the sovereign rating of the country which helps us in getting competitive rates with suitable tenors.

“IRFC launched its USD 750 mn 144A/Reg S USD Bonds under the 4 billion GMTN program on 3^rd February 2021. The bonds received an overwhelming response from a diverse set of investors spread across the globe and was oversubscribed nearly 4 times. The bonds are for a tenor of 10 years and were very tightly priced at 167.50 bps over a 10-year benchmark rate pegging the coupon at 2.80%. The fact that IRFC has been able to achieve pricing even below the price at which its own secondary paper was trading in the international market, is a remarkable achievement.

The diverse set of investors included Sovereign Wealth Funds, Pension Funds, Life Insurance Companies, Banks, and Asset Management Companies spread across Asia, Middle East, Europe, and the USA.

“The bonds achieved one of the tightest pricing by an Indian entity in the recent times. In spite of recent hardening in US treasury and credit margins, IRFC has been able to achieve very fine pricing lower by approximately 55 bps as compared to recent issuances of identical tenor by its peers. This will help not only in the diversification of borrowing portfolio of IRFC but also bring down the cost of borrowing of the company further in the current fiscal.”

The bonds will be listed on the Singapore Exchange Securities Trading Limited, India International Exchange (IFSC) Limited and International Securities Market of the London Stock Exchange. 

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February 05, 2021