CANADA PROVINCE ISSUES MASALA BONDS, EYES INDIAN INFRA

Canadian province of British Columbia (BC) has become the first foreign government to issue a rupee-denominated bond, signalling its desire to play a role in India’s infrastructure development plans.

Rupee-denominated bonds are popularly known as masala bonds. The BC government bond was placed on the London Stock Exchange (LSE) where recently issued Indian masala bonds, by home-loan lender HDFC and public sector company NTPC, are listed.

In a statement, the province’s finance minister Michael de Jong said, “The masala bond issuance offers British Columbia a means to become well-positioned to profile our confidence in the outlook for India, and to participate in the internationalisation of the rupee and India’s economy.”

Canada’s high commissioner to India Nadir Patel welcomed the move, as he noted: “This bold move by the government of BC, to be the first sovereign government to issue a masala bond, highlights the confidence that BC and Canada are showing in the Indian economy.”

The bond, with a three-year term, raised nearly Canadian $100 million (₹670 crore) on the London Stock Exchange, and is re-invested in another masala bond, issued by India’s Housing Development Finance Corporation Limited (HDFC).

“India is one of the fastestgrowing economies in the world and is one of BC’s priority export market partners,” de Jong said.

The move of issuing a masala bond follows the province’s earlier venture into a Chinese currency-denominated bond in 2013.

HDFC chairman Deepak Parekh said in a statement: “We are pleased to know that BC has also successfully placed ₹500 crore of rupee-denominated masala bonds and utilised the proceeds to invest into HDFC’s masala bond issue.”