IDBI Bank - The first Dim Sum Bond Issuer from India
IDBI bank becomes the first Dim Sum Bond Issuer from India. The 3 year bond is priced at a fixed coupon of 4.5% p.a.
- (1888PressRelease) November 17, 2011 - Mumbai: IDBI Bank issued the first Dim Sum Bond from India. The highly successful and landmark transaction was priced on Friday, November 11, 2011. The Bank priced a Renminbi (RMB) 650 million bond which was issued through its Dubai International Financial Centre (DIFC) branch under its USD 1.5 billion MTN programme. The 3 year bond was priced at a fixed coupon of 4.5% p.a. The issue was lead managed by HSBC. The Dim Sum bond issued by IDBI Bank was the first such issue from emerging markets thus providing testimony to the faith reposed by global fixed income investors in IDBI Bank's credit story.
IDBI Bank undertook quick fire road shows on November 9 and 10, 2011 in Hongkong and Singapore which were extremely well attended with a diverse set of RMB focused banks, asset managers and private banks who were eager to hear the IDBI Bank story. The highly impressive roadshows led to some large accounts indicating interest in an issuance and IDBI Bank decided to capitalize on the same and launched a deal immediately thereafter despite the extreme volatility that continued to prevail in the global credit markets.
The transaction was announced in the forenoon of November 11, 2011 as a RMB 500 million 3 year bond in the 4.625% area. Driven by demand for an attractive India centric debut credit, the transaction attracted interest from a diversified array of investors including banks, private banks and asset managers which resulted in an oversubscription to RMB 900 million. This in turn enabled IDBI Bank to tighten the pricing to 4.5% and increase the deal size to RMB 650 million. The deal was closed in the evening of November 11, 2011.
Shri R. M. Malla, Chairman & Managing Director, IDBI Bank, while commenting on the issue stated "We have been observing this fast developing market segment for some time now, and in line with our objective of achieving low cost funding as well as diversifying our investor base, we decided to access this market last week in a nimble footed manner. It is a true testimony to the faith that the global investor community reposes in IDBI Bank that we managed to undertake a tightly priced and oversubscribed deal at a time when market conditions were overwhelmingly volatile with virtually no issue getting priced".
Shri Melwyn Rego, Executive Director who was on the road shows at Hongkong and Singapore stated that, "The Dim Sum bond market is a fast expanding market, driven by the growth of offshore RMB deposits. IDBI Bank decided to access this market as an attractive funding cum diversification play as also to cultivate an entirely new and fast developing investor class. The speed with which the transaction was executed was indeed amazing with the entire deal being put through within a week. The Bank has already lined up assets which will be funded from the proceeds of the bond issue".
Shri R. V. Iyer, Chief General Manager mentioned that the proceeds of the Dim Sum Bond Issue which was made under the USD 1.5 billion MTN programme listed on the Singapore Stock Exchange, would be received on November 18, 2011.