KOCHI:In a big boost to Kerala’s overseas fundraising plans, international rating agencies have assigned a good rating for Kerala Infrastructure Investment Fund Board’s (KIIFB) Rs 5,000-crore masala bonds issue, slated to hit the market in the coming weeks.
The rating agencies have assigned a rating which is a notch below India’s sovereign rating, Finance Minister T M Thomas Isaac said on Friday. India’s sovereign rating is ‘BBB-. One notch below the sovereign rating is ‘BB+’.
Isaac said the fundraising by KIIFB will go ahead as planned, and the roadshows will be held in September or at the latest in October. “The masala bonds issue will go ahead as planned,” he said, adding that this should not be linked to the ‘Rebuild Kerala’ fund mobilisation being undertaken by the state government.
“KIIFB has been assigned to finance separate infrastructure projects. The funds collected will go only for those projects. The state cannot touch those funds or divert the funds for other projects. And this is protected by the KIIFB Act,” Isaac said.
RBI nod for masala bonds
KIIFB had appointed Standard & Poor’s and Fitch Ratings for rating the masala bonds issue. Official sources said though KIIFB has appointed two rating firms, it can choose the highest ratings amongst the two.Finance Minister Thomas Isaac said that KIIFB has received all the statutory approvals, including from the Reserve Bank of India, for the masala bonds.
Earlier, Axis Bank and Standard Chartered Bank were appointed arrangers for the masala bond, which is a rupee denominated bond, which will be listed on London and Singapore stock exchanges.
The funds will be raised in tranches over a period of 10 years, according to government sources.
The infrastructure funding arm has approved a total of 367 projects requiring a total investment of over Rs 22,000 crore.
Isaac to meet Jaitley
Meanwhile, Thomas Isaac is travelling to Delhi on September 11 to meet Union Finance Minister Arun Jaitley and other key officers in North Block.The purpose of the visit is to request the Central government to raise the state’s borrowing limit from 3 per cent to 4.5 per cent of the GDP, considering the dire financial situation brought about by the floods.If the limit is raised to 4.5 per cent of GDP, the state can raise Rs 10,500 crore.
Thomas Isaac to meet Arun Jaitley on September 11 to urge him to raise Kerala’s borrowing limit