The public sector lender, IDBI Bank has pioneered in offshore fund raising by successfully accumulating funds in offshore yuan in Hong Kong. The bank has signaled a new set of borrowers to enter the growing bond market.
The bank has driven to raise funds overseas due to steady increase in rupee interest rates, while the yuan's attractiveness has received a boost after New Delhi added the Chinese currency as external financing vehicle to the US dollar, Japanese yen, euro and the pound sterling in September. India has set a $1 billion limit for borrowing in yuan within the $30 billion overseas borrowing limit for companies.
IDBI has sold bond at a lower-than-projected yield of 4.5%, indicating demand from investors for yuan-linked assets remained intact despite a September selloff in Asian rates and FX. The three-year deal was eventually priced at 4.5%, below an initial projection of 4.625%. The issue size was expanded to 650 million yuan ($101 million) from an expected 500 million yuan. The order book closed at around 900 million yuan with more than 20 accounts involved.
