THIRUVANANTHAPURAM: Canda's biggest public pension fund is in advanced talks to invest about $200 million in Kerala Infrastructure Investment Fund Board’s (KIIFB) proposed masala bonds. The high-profile investment will be a big boost to the state’s innovative fund to finance critical and large infrastructure projects. “The modalities will be finalised at a meeting with the Canada Pension Plan Investment Board (CPPIB) by the end of this month. They’ll subscribe the masala bonds to be issued by the KIIFB,” said Sanjeev Kaushik, KIIFB Deputy Managing Director and Finance Principal Secretary (Resources).
CPPIB: First tranche of masala bond to be issued mid-March
Canada Pension Plan Investment Board (CPPIB), which invests across the globe for 20 million Canadians, manages more than $300 billion worth assets including bonds, public and private equities and real estate. It has invested $72.5 billion in Asia, the fund’s second biggest investment after the US ($135.1 billion). The KIIFB received RBI sanction to raise Rs 2,600 crore through masala bond issue. It is part of the Rs 5,000 crore guaranteed medium-term note (MTN) programme devised by the Board.
The bond has a maturity of five years and the interest rate would be fixed after the marketing roadshows next week. The first tranche of the masala bond worth Rs ,500 crore will be issued mid- March. The programme is dual- listed on the International Securities Market of the London Stock Exchange (LSE) and the Singapore Stock Exchange (SGX). KIIFB is the first state government entity in the country to issue masala bond. International credit-rating agencies Standard and Poor’s (S&P) and Fitch Ratings (Fitch) have given a BB rating with a stable outlook to the KIIFB.
The MTN Programme has also been rated BB with stable outlook by both the agencies. The Axis Bank and Standard Chartered Bank are the dealers for the MTN Programme while DLA Piper and Cyril Amarchand Mangaldas are the international legal counsel and domestic legal counsel respectively for the transaction. The marketing roadshows for the masala bond would be held in London, Dubai, Singapore and Hongkong next week. Established in 1999 and restructured in 2016, KIIFB has so far approved 512 projects worth Rs 41,325.91 crore.
Canada Pension Plan The Canada Pension Plan Investment Board (CPPIB) manages the Canada Pension Plan, an earnings-related pension scheme run by the state. The pension plan has 20 million Canadian citizens as members. Its portfolio was C$ 454 bn by the end of 2018. The CPPIB started investing in India in 2009. Its portfolio in the country was about C$ 7 bn in August last year.
Amount invested in Asia by Canada Pension Plan Investment Board