The Kerala Infrastructure Investment Fund Board (KIIFB) has floated masala bonds for Rs 21.50 billion, thus creating a landmark in international debt capital markets transactions. Besides, this is not only the first offshore capital market issuance from a state-level entity from India but the largest dual currency issue by a sub-sovereign backed entity from all of the emerging markets and Asia. According to Anie Jula Thomas, Joint Fund Manager, Kerala Infrastructure Investment Fund Board, “The transaction has seen strong participation from a wide spectrum of investors, including asset managers, insurance companies, pension funds and banks, as well as private wealth managers.” To date, the masala bond market had reportedly seen issuance only from the large Indian corporate sector and public institutions like NHAI and NTPC, which are AAA-rated in the domestic market. The successful closing of this deal is thus expected to open up new avenues for KIIFB. Also, reports suggest this is the second largest mobilisation in the masala bond market by any public-sector company in India and, in absolute size, the third largest issue by any Indian entity in the history of the bond since the instrument was cleared by the Reserve Bank of India in 2016. “This is a great achievement for Kerala,” underlines Thomas. “We are further thinking of testing dollar bonds and diaspora bonds.” Axis Bank and Standard Chartered Bank were reportedly the joint lead managers for the masala bond issuance, while DLA Piper and Cyril Amarchand Mangaldas acted as the international legal counsel and domestic legal counsel, respectively. - DIKSHA JAWLE