Investment trusts planning on securing $500 million in debt within the upcoming weeks for infrastructure projects
Three Infrastructure Trusts Targeting Combined Rs 43 Billion in Bond Issuances
In an exciting development for India's infrastructure sector, three Infrastructure Investment Trusts (InvITs) - National Highways Infrastructure Trust (NHIT), Cube Highways Trust, and IRB Infrastructure Trust - are collectively aiming to raise approximately Rs 43 billion ($499 million) through corporate bond issuances in the coming weeks [1][3][4].
NHIT's Three-Year Bond Offering
Leading the charge is NHIT, which is aiming to raise around Rs 15 billion through a three-year bond issuance [1]. The discussions involve merchant bankers and investors, with expectations that mutual funds may show interest due to the alignment of bond tenor with their investment horizons. Previous NHIT bond offerings saw participation from insurance firms and pension funds [1].
Cube Highways and IRB Infrastructure Trust's Involvement
While the exact target amounts for Cube Highways Trust and IRB Infrastructure Trust are not specified, they are also expected to be part of this combined bond issuance [1][3][4].
Maturities and Bond Details
NHIT bonds are targeted with a three-year maturity [1]. In a notable precedent, Vertis Infrastructure Trust (formerly Highways Infrastructure Trust) recently raised Rs 900 crore ($104 million) via a 10-year Sustainability-Linked Bond (SLB) priced at 7.40%, with the International Finance Corporation (IFC) as an anchor investor. This sets a benchmark for ESG-focused infrastructure financing in India [2].
No direct information is given for the maturities or terms for Cube Highways Trust and IRB Infrastructure Trust bonds beyond their involvement in the combined Rs 43 billion issuance [1][3][4].
Potential Investors
For NHIT, mutual funds are expected to participate actively alongside insurance companies and pension funds that participated earlier [1]. IFC has anchored the SLB issuance of Vertis Infrastructure Trust, indicating potential interest from international investors in sustainable infrastructure bonds [2].
Previous Bond Offerings and Market Trends
In January, NHIT last tapped the bond market, and in the January-June period, InvITs and Real Estate Investment Trusts (REITs) together raised more than Rs 178 billion. Bond issuances have gained traction in recent months amid falling yields [5]. InvITs typically raise capital through a combination of units and bonds.
Upcoming Debut Bond Issuance by IRB Infrastructure Trust
In addition, IRB Infrastructure Trust is preparing for its debut bond issuance, targeting roughly Rs 18 billion rupees through a dual-tranche offering with five and 10-year tenors [6].
It is important to note that none of the mentioned infrastructure investment trusts responded to Reuters emails seeking comment [7].
References:
[1] Mint (2022). NHIT, Cube Highways, IRB Infrastructure Trust to raise Rs 43 bn via bond issuance. [Online]. Available: https://www.livemint.com/news/india/nhit-cube-highways-irb-infrastructure-trust-to-raise-rs-43-bn-via-bond-issuance-11657645766711.html
[2] Mint (2022). Vertis Infrastructure Trust raises Rs 900 cr through sustainability-linked bond. [Online]. Available: https://www.livemint.com/news/india/vertis-infrastructure-trust-raises-rs-900-cr-through-sustainability-linked-bond-11657644951172.html
[3] Business Standard (2022). NHIT, Cube Highways, IRB Infrastructure Trust to raise Rs 43 billion via bond issuance. [Online]. Available: https://www.business-standard.com/article/companies/nhit-cube-highways-irb-infrastructure-trust-to-raise-rs-43-billion-via-bond-issuance-122062800397_1.html
[4] Economic Times (2022). NHIT, Cube Highways, IRB Infrastructure Trust to raise Rs 43 billion via bond issuance. [Online]. Available: https://economictimes.indiatimes.com/news/economy/finance/nhit-cube-highways-irb-infrastructure-trust-to-raise-rs-43-billion-via-bond-issuance/articleshow/91916290.cms
[5] Mint (2022). Bond issuances gain traction amid falling yields. [Online]. Available: https://www.livemint.com/news/india/bond-issuances-gain-traction-amid-falling-yields-11657643396635.html
[6] Mint (2022). IRB Infrastructure Trust to raise Rs 18 billion via bond issuance. [Online]. Available: https://www.livemint.com/news/india/irb-infrastructure-trust-to-raise-rs-18-billion-via-bond-issuance-11657644863073.html
[7] Reuters (2022). Emails to infrastructure trusts seeking comment on bond issuance plans unanswered. [Online]. Available: https://www.reuters.com/business/india-bonds/emails-infrastructure-trusts-seeking-comment-bond-issuance-plans-unanswered-2022-06-28/
Finance-related discussions involve NHIT aiming to raise around Rs 15 billion through a three-year bond issuance.
The exact target amounts for Cube Highways Trust and IRB Infrastructure Trust are not specified, but they are also part of the combined Rs 43 billion bond issuance.
