Guarantee for Privately Placed Samurai Bonds Issued by Exim Bank of India Invigorating the Samurai Bond Market and Supporting Diversification of Exim Bank’s Funding Sources
Catalyzing International Finance NR2010-66
March 8, 2011
March 8, 2011
- The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)*1 signed today a set of agreements to provide a guarantee for yen-denominated foreign bonds issued by the Export-Import Bank of India (EIBI) in the Japanese bond market (Samurai bonds).*2 JBIC's guarantee will cover the principal and part of the interest of privately placed Samurai bonds by EIBI aggregating to 20 billion yen. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. and Mizuho Securities Co., Ltd. are joint lead arrangers, while Mizuho Corporate Bank, Ltd. is the bond administrator.
- The guarantee was extended under JBIC's Guarantee and Acquisition toward Tokyo market Enhancement (GATE) facility.*3 As part of efforts to fulfill its mission of "maintaining and improving the international competitiveness of Japanese industries," JBIC supports Samurai bond issues by foreign entities in the Tokyo bond market by providing credit enhancement. JBIC is thus helping to expand and diversify the range of investment opportunities available to Japanese investors and to activate the Samurai bond market. This is the first guarantee for Samurai bonds issued by a government agency under the GATE facility as well as the first guarantee for Samurai bonds provided for an Indian issuer.
- After the global financial crisis, the Indian economy registered 8.0% real GDP growth in fiscal 2009, and is estimated to grow by 8.5% in fiscal 2010. Currently there are plans for a number of investment projects, especially in the infrastructure sector. Given the country's prospects for high growth, Japanese businesses are expected to become increasingly active in India. EIBI's mission is to promote India's international trade and investment, thereby supporting domestic growth. The provision of this guarantee will help EIBI diversify its funding sources and further contribute to economic growth in India and trade in the Asian region. JBIC hopes that such developments will also invigorate the Japanese economy.
- JBIC will continue to support the issuance of Samurai bonds by foreign governments or government agencies in the Tokyo bond market under the GATE facility.
- *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
- *2 Samurai bonds are yen-denominated bonds issued by a foreign government or company in the Tokyo bond market.
- *3 See Press Release dated April 15, 2010.