"India is one of the fastest-growing economies in the world and is one of B.C.'s priority export market partners. We are delighted at the prospect of strengthening and expanding bilateral relations,” said de Jong. "The Masala bond issuance offers British Columbia a means to become well-positioned to profile our confidence in the outlook for India, and to participate in the internationalization of the Rupee and India's economy. We are pleased to know proceeds from the bond will be put to work in India's housing industry by HDFC, a well-established corporate leader that finances an industry in which we aspire to grow our B.C. wood exports."

VICTORIA – British Columbia has become the first foreign government to issue an Indian Rupee denominated bond on the London Stock Exchange.

The province made the move Thursday with Finance Minister Michael de Jong boasting that BC was first-ever foreign government to issue a bond in the Indian offshore market and strengthening increasingly important trade and investment ties with India.

"India is one of the fastest-growing economies in the world and is one of B.C.'s priority export market partners. We are delighted at the prospect of strengthening and expanding bilateral relations,” said de Jong. "The Masala bond issuance offers British Columbia a means to become well-positioned to profile our confidence in the outlook for India, and to participate in the internationalization of the Rupee and India's economy. We are pleased to know proceeds from the bond will be put to work in India's housing industry by HDFC, a well-established corporate leader that finances an industry in which we aspire to grow our B.C. wood exports."

"This bold move by the Government of B.C., to be the first sovereign government to issue a Masala bond, highlights the confidence that B.C. and Canada are showing in the Indian economy. It reflects our strongly held view that India continues to improve its economic outlook under the leadership of Prime Minister Modi. This back-to-back issue, where the proceeds will be re-invested in India through the Housing Development Financing Corporation shows that B.C. and Canada continue to find imaginative ways to invest in India to help it achieve its core objectives of building needed infrastructure for this fast emerging economy. Furthermore this will increase Canada's already substantial investments, estimated to be in the order of $15 billion in India's infrastructure," said High Commissioner of Canada to India Nadir Patel

The bond raises Indian Rupee (INR) funds from global investors outside of India and is colloquially known as a "Masala" bond. B.C.'s three-year-term Masala bond was priced to yield 6.62% semi-annual, and raised 5 billion INR, or about C$97.5 million, equivalent. A Masala bond is also called a synthetic INR note because payments under the bond are in U.S. dollars based on the prevailing INR/US dollar exchange rate.

BC government press released said Bond proceeds were immediately reinvested in a Masala bond issued to the Province by the Housing Development Finance Corporation Limited (HDFC) of India, which it claimed will generate a positive return for taxpayers and protect against foreign exchange risk. HDFC is one of the largest originators of housing loans in India, specializing in providing housing finance primarily for the purchase and construction of residential housing. The company is well established and has a domestic credit rating of triple-A. Net income on the INR investment will be

used to support and expand the Province's trade and investment activities in India.

The government said the bond issue also demonstrates the Province's confidence in the outlook for India, and positions B.C. to participate in internationalization of the INR and India's economy.

India is one of the world's fastest-growing emerging markets, and British Columbia values the ongoing business and economic partnerships, and is taking many steps to strengthen the relationship including:

• 
• Trade and Investment Representatives in Vancouver, Mumbai, Bangalore and Chandigarh are trained to help British Columbians find export opportunities in India.

* The Business Accelerator in Bangalore offers British Columbians a dedicated work environment and the support of local trade and investment representatives to grow their business in India.

* The B.C. government has committed $5 million over three years to promote a stronger B.C. wood brand in India. This investment is helping B.C. companies establish themselves as the world's leading suppliers of sustainably harvested wood products to a market that includes the world's largest middle class.

* B.C. is also working on a reciprocal arrangement where representatives from the Province of B.C. would work in India to learn and share their knowledge and experience, and representatives from India would come to B.C. to do the same. 

B.C. has established a reputation as leader in leveraging international bond issuances to open doors to new investors and raise British Columbia's profile in the Asia-Pacific region. The Province of B.C. was the first foreign government to issue bonds into the offshore Chinese Renminbi market in 2013, and the first foreign government to be approved by Chinese authorities to issue in China's domestic bond market in December 2015, following which the Province issued a domestic bond in January 2016.

B.C. appointed HSBC and TD Securities as joint lead managers and Scotiabank as co-manager for its Masala bond. The issue was more than three times oversubscribed with investors from North America, Europe and Asia, taking 56%, 30% and 14% respectively.