Edelweiss Financial’s arm raises Rs 502 crore through masala bonds

ECL Finance, a subsidiary of Edelweiss Financial Services has successfully issued its first international Rupee denominated USD settled Senior Secured Notes (commonly known as Masala Bonds) on October 28, 2016. The Masala Bonds aggregating to Rs 502 crore ($75 million equivalent in rupee) were issued with a coupon of 9.05% paid semi?annually due 2019. Sun Global Investments, London and Emirates NBD Bank, Dubai, were the Global Coordinators and Joint Lead Managers for the issue. This is a rupee based transaction and there is no foreign exchange exposure for the Company. The issue proceeds would be used by the company for repayment of existing debts, supporting growth and other general corporate purposes as permitted under the applicable Reserve Bank of India (RBI) guidelines. The bonds are proposed to be dual listed and traded on the Singapore Stock Exchange and the Stock Exchange of Mauritius.

The Company’s long term domestic debt rating is AA (CARE, ICRA) / AA+ (Brick Works). The Masala Bonds issue further diversifies the funding mix and increases funding sources for the Company in addition to the traditional funding sources i.e. financing from Indian banks and domestic bond issuances.

Edelweiss Financial Services is primarily engaged in the business of rendering merchant banking services. The company operates in two segments - agency business and holding company activities.