British Columbia issued a Masala Bond listed in London Stock Exchange

Category: Financial Services,  News Source: Business Standard,  Updated-On: Sep 6 2016

The Canadian Province of British Columbia becomes the first foreign government entity to issue a Masala bond, choosing London, the global home for Masala bonds, for its listing.

The Canadian province of British Columbia is book building for its debut issue of offshore rupee bonds.Initial price guidance for the benchmark-sized offering with a tenor of three years and four months is 6.68-6.73 percent.

British Columbia’s bond with a three year tenor was priced to yield 6.62 per cent semi-annually. The Masala bonds will be issued in 144A/Reg S format and will be listed on the London Stock Exchange.

The bond raised $75 million (about Rs 500 crore) with 6.62 per cent semi-annual yield, securing high-quality investor support from across Europe, Asia and America. It is a AAA rated bond by the three major rating agencies and will mature on January 9, 2020, The Province of British Columbia said in a statement on Friday(2nd September).                                                                                                                                              Source:Business Standard

The masala bond issuance offers British Columbia a means to become well-positioned to profile our confidence in the outlook for India, and to participate in the internationalization of the rupee and India’s economy.

Generally, Masala bond is a term used to refer to a financial instrument through which Indian entities can raise money from overseas markets in the rupee, not foreign currency. These are Indian rupee denominated bonds issued in offshore capital markets.

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