Economic milestone for UK-India relations in first Indian corporate ‘Masala Bond’ issuance….reports Asian Lite News
The Synthetic INR (Indian Rupee) Notes are being issued by Housing Development Finance Corporation (“HDFC”) and listed on the London Stock Exchange. Freshfields Bruckhaus Deringer LLP (‘Freshfields’) has advised on the first ever corporate issuance of Synthetic INR Notes, otherwise known as ‘Masala Bonds’. The INR30,000,000,000 7.875% Notes are due 2019 and issued by HDFC, India’s leading housing finance company.
Despite volatility in global markets following the Brexit vote, the INR denominated Notes, which are only sold to offshore buyers, proved to be very popular with investors, being 4.3 times oversubscribed. This issuance marks a significant moment for UK-India relations, helping to position London as an international hub for offshore Indian rupee financing.
The Freshfields team worked closely with HDFC treasury and legal as well as the joint lead managers (Axis bank, Credit Suisse and Nomura) on all aspects of this first corporate Masala Bond issuance.
The London based team was led by corporate partner and Chairman of the Freshfields’ India Group, Pratap Amin, and counsel, Nick Hayday together with partners Duncan Kellaway and Peter Allen.
HDFC’s Chairman, Deepak Parekh, said, “We are very pleased to have diversified our borrowing profile by attracting capital from new sources and to have achieved our objective with a landmark listing of our “Masala Bonds” on the London Stock Exchange.”
V.S. Rangan, Executive Director of HDFC, commented, “There appears to be renewed vigour in the relationship between India and the UK and we are delighted to have listed our Masala Bonds on the London Stock Exchange. The complex nature of this milestone issuance – the first of its kind – brought to the fore the strengths and expertise of the combined team, whose experience in advising on such ground-breaking capital markets deals we greatly value.”
Commenting on the issuance, the Chairman of Freshfields’ India Group, Pratap Amin, said “We are delighted to have been entrusted by the highly regarded team at HDFC with the task of helping to launch a new Indian corporate fundraising market that will hopefully contribute to the strengthening of the relationship between the UK and India at this important time and enable quality Indian corporates to tap global investors through these INR denominated Masala Bonds. We very much look forward to continuing to assist in the development of this market.”
Nick Hayday of Freshfields added, “This is a strategically important transaction for all parties involved and we are delighted that we have been able to assist HDFC and the underwriters in establishing the London listed corporate Masala Bond market.”