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Bloomberg
State-owned Export-Import Bank of India sold its first dollar bond in Taiwan’s Formosa debt market, joining Korea’s Kookmin Bank and Europe’s ABN Amro Bank NV so far this year to tap local investors demand for floating-rate debt that offers protection to buyers.
Overseas issuers have been able to obtain “some pricing advantages from Formosa floaters compared to the global Eurobond floaters,†according to Frank Kwong, head of primary markets for Asia-Pacific at BNP Paribas SA, which was a bookrunner on the ABN Amro deal.
India Exim priced a $400 million five-year floater at 100 basis points over three-month Libor.
“There is a decent pool of liquid capital available with the investors†in Taiwan, said India Exim’s
deputy managing director David Rasquinha. “I see no reason not to go back to the Formosa market.â€
Sales of floating-rate notes in the market rose to about $3.5 billion last year from almost none in the previous 12 months, and issuance this year is running at about $1.8 billion, as investors contend with rising US interest rates. Taiwanese banks are participants in a lot of Asian loan deals and a slowdown in that market this year may mean lenders “need to buy some floating-rate notes to offset†that trend, according to BNP’s Kwong.
Issuers including Verizon Communications, AT&T and Citigroup have sold about $30.7 billion in 2017 in the Formosa market. Mumbai-based India Exim’s dual-listed dollar bonds meant that the notes could also be bought by investors in Asia outside Taiwan.