NaBFID has raised $750 million through its first 10-year dollar-denominated bond, attracting over $2 billion in bids. The successful issue, priced 25 basis points below initial guidance, supports the institution's plan to raise $4 billion offshore by the end of 2026 to fund national infrastructure projects.
The National Bank for Financing Infrastructure and Development (NaBFID) has marked its entry into international debt markets by raising $750 million through a 10-year dollar-denominated bond. The issue saw strong demand from global investors, with the order book exceeding $2 billion. This high interest allowed the institution to set the final coupon at 6.1220%, which was 25 basis points lower than the initial pricing guidance of 130 basis points over U.S. Treasuries.
Supporting Infrastructure Financing
This bond sale is a key part of NaBFID’s broader liquidity strategy. The institution aims to raise a total of $4 billion from offshore markets by the end of 2026. This move follows previous funding activities, including external commercial borrowings of $850 million in August and a $125 million dollar loan earlier in March. The capital raised will be used to support the institution's primary mandate of funding long-term infrastructure projects across India, which is critical for economic development.
Role of the RBI Swap Facility
A significant factor in the success of this issuance was the Reserve Bank of India’s (RBI) swap facility. This mechanism allows state-run entities to hedge their currency risks—protecting against fluctuations between the rupee and the dollar—at a subsidized cost. This facility has been instrumental for several state-run institutions, helping them collectively raise approximately $13 billion in offshore funds since June. By leveraging this support, NaBFID has been able to manage borrowing costs more effectively compared to standard market rates.
Strengthening the Balance Sheet
By establishing a footprint in the global dollar bond market, NaBFID is diversifying its liability profile, similar to other major state-run powerhouses like Power Finance Corporation. For investors and stakeholders, this provides a clearer view of the institution's ability to tap into varied sources of capital to meet its infrastructure financing targets. The next steps for the institution will involve managing the deployment of these funds into long-term projects, while monitoring the global interest rate environment that influences the cost of dollar-denominated debt.