India: Resurgence bond taps diaspora

On August 24 when Asian markets were being blighted by Russia's debt default, the Indian government was busy closing a $4.23 billion deal that made investment bankers salivate. Over 74,000 expatriate Indians in over 30 countries bought up five-year Resurgent India Bonds (RIBs) denominated in dollars, sterling and Deutschmarks in what was the single largest debt offer out of India. The dollar bonds carried a coupon of 7.75%, a spread of 225 basis points over US treasuries. The State Bank of India, India's largest commercial bank that issued the bonds on behalf of the government, clinched the sale in just 20 days.