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Listen to this article in summarized format The 15-year bond, which is expected to carry a MIGA guarantee, will help the development finance institution access longer-term overseas funding, a key requirement for a lender financing long-gestation infrastructure projects. Read more: Will Nifty extend gains to 4th session on Monday? US sanctions on Russia among factors to decide D-Street action NaBFID is set to initiate the raising of $500 million via a 10-year overseas bond, while simultaneously negotiating a $1 billion MIGA-backed bond with a longer 15-year maturity. This financial strategy aims to secure essential long-term funding for infrastructure developments. "We are in the market to raise an indicative amount of $500 million, with a tenor of 10 years," a company executive said. NaBFID is targeting around $4 billion in dollar funding by December through a mix of loans and bonds, including the current $500 million bond and external commercial borrowings. The institution is tapping the Reserve Bank of India's concessional US dollar-rupee swap facility, which was operationalised in June to lower hedging costs for eligible overseas borrowings. The facility provides a concessional swap cost of 1.5% a year for eligible external commercial borrowings and overseas foreign currency borrowings, with drawdowns permitted until December 31. Read more: JioBlackRock CIO Rishi Kohli decodes Nifty’s inflection point after two years of weak returns The cost advantage of overseas borrowing, however, has narrowed as US Treasury yields have risen. After factoring in the 1.5% swap cost, dollar borrowing costs are now closer to domestic bond market rates. "About two months back the savings were quite substantial. Now it has almost come to the domestic bond market rates. It is slightly cheaper," the executive said. Bank of Maharashtra recently raised $500 million through a five-year US dollar bond at 130 basis points over US Treasuries, with a 6.112% coupon. Including the 1.5% swap cost, the effective cost would be around 7.6%, broadly in line with current domestic borrowing costs for comparable institutions. The cost of NaBFID's 10-year bond will depend on the prevailing US Treasury yield and the spread at which the issue is priced. The proposed MIGA-backed borrowing will be a separate 15-year tranche of around $1 billion. "That will be a 15-year tranche. And that will be almost a billion dollar," the executive said. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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