An Indian bank on Monday issued the first ever offshore rupee-denominated bond in London, a landmark celebrated by officials keen to highlight Britain''s international business prowess despite Brexit. The Housing Development Finance Corporation (HDFC), India''s largest provider of housing finance, raised 30 billion Indian Rupees ($450 million, 400 million euros) by issuing so-called "masala" bonds. The three-year bond, which carries an 8.33 percent yield (interest rate), was four-times oversubscribed, according to a Treasury press release.
"It (the bond) represents a major vote of confidence in London as the leading global financial centre and is further proof that Britain is a great place to do business," said new British finance minister Philip Hammond. Alok Sharma, British minister for Asia, added: "I very warmly welcome HDFC''s choice of the London Stock Exchange to list this world-first rupee bond, a clear signal of London''s standing as the leading international financial centre." London''s major financial centre has already hosted many issues of securities by foreign institutions. China issued its first sale of offshore renminbi in London''s fledgling market in May, borrowing $457 million.
Since being appointed last month, prime minister Theresa May''s government has been desperate to promote Britain''s business credential on the world stage, following warnings by economists that its shock decision to leave the European Union would harm its economy. The June 23 EU referendum appears to have brought uncertainty to many industries as Britain begins the long process that will lead to high-stakes negotiations to set the terms of London''s relationship with Brussels and the single market. The long-term economic impact of Brexit is difficult to quantify but economists predict further turbulence in the short term, borne out by early indicators released since the referendum.
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