IL&FS appoints banks for RMB bond issuance
Indian infrastructure investor IL&FS has selected Deutsche Bank, RBS and UBS to handle its renminbi-denominated “dim sum” bond issue in Hong Kong. The private equity firm aims to raise the equivalent of $200 million, Reuters reported.
Should the deal go through, IL&FS would become the first Indian firm to issue renminbi-denominated bonds. Sources speaking to the newswire did not indicate how IL&FS would allocate the raised capital, nor a timeline for the issue, though they did indicate that firms tend to issue offshore renminbi bonds with a tenure of 1-5 years.
A total of RMB83 billion ($12.9 billion) worth of dim sum bonds has been issued so far this year, compared with RMB42.6 billion during all of 2010. The high volume of bond offerings has allowed top-rated issuers to pay less than 1% interest on their bond.
In India, where the central bank has raised interest rates 11 times since early 2010, a top-rated issuer must offer a coupon of around 9.75% for two-year money.
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