With reference to IFC Masala Bonds, sometimes seen in the news, which of the statements given below

Question

With reference to IFC Masala Bonds, sometimes seen in the news, which of the statements given below is/are correct?The International Finance Corporation, which offers these bonds, is an arm of the World Bank.They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.Select the correct answer using the code given below.

Accepted Answer

Bonds are instruments of debt - typically used by corporates to raise money from investors. Masala bonds have to be explained in the context of Indian corporates raising money from overseas investors.The International Finance Corporation (IFC), the investment arm of the World Bank, issued a Rs. 1,000 crore bond in November last year. The purpose of the issue was to fund infrastructure projects in India.Companies including NTPC, Neyveli Lignite Corporation, Power Finance Corporation, Power Trading Corporation and Rural Electrification Corporation are likely to launch these Masala Bonds totalling $1 billion in the next three or four months in the UK to gauge the investor appetite.The tenor of these bonds is likely to be limited to a band of five to seven years and these are going to be in smaller denominations ranging from $150-250 million. These will be subject to decisions made by the Boards of the PSU energy companies.