Fullerton India will issue Rupee denominated Masala Bonds of INR 5 billion with a fixed annual coupon of 8.125% and a tenor of 3 years and 1 month.
“This is a landmark transaction and enables Fullerton India to tap and develop a new source of funding. It reaffirms our position as leaders in creating innovative financing options. This also leverages the recent reforms from the government and regulators. It matches our asset profile well and finances Fullerton India’s future growth plans ideally”, said Shantanu Mitra, CEO and MD of Fullerton India Credit Company Ltd.
The Notes will be listed on the Singapore Stock Exchange. Fullerton India plans to use the proceeds of the Masala Bonds for on-lending in relation to normal business requirements and other financing activities among other potential uses.
“Credit Suisse is delighted to partner with the blue chip Fullerton India, further cementing our relationship with the group, to bring this innovative financing solution to the market. As the first Singapore listed masala bond to come from an Indian nonbanking finance company, this transaction supports the issuer’s fund raising plans as well as offers overseas investors the opportunity to access a new asset class. The masala bond product remains attractive given the deep pool of liquidity available for Indian borrowers,” noted Rajiv Baruah, Head of India Fixed Income for Credit Suisse, the banking arm of Credit Suisse in India.
Masala bonds are instruments through which Indian entities can raise funds by accessing the overseas capital markets, while bond investors bear the currency risk. This is a Rupee based transaction and there is no foreign exchange exposure for the company.
The Rupee denominated bonds have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold within the United States except in accordance with Regulation S or pursuant to another available exemption from the registration requirements of the Securities Act.