London Stock Exchange Listing Debt on Page 1 The London Offer - - PDF document

Listing Debt on London Stock Exchange

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The London Offer

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“Today, we have outlined a bold and ambitious vision for

• ur strategic partnership, and the decisions we have

taken today reflect our firm commitment to pursue it and the confidence to achieve it. Indeed, the outcomes today have shown that we have already taken our relationship to a new level.” Narendra Modi “It’s a real opportunity to open a new chapter in the relationship between our two countries.” David Cameron “We will also increasingly raise funds in London’s financial market. I am pleased that we will issue a railways rupee bond in London stock market. This is – for this is where the journey of Indian Railways had begun.” Narendra Modi “We will work together with the British Government, industry, and the financial market to deepen our relationship and harness that interest in India’s infrastructure. Very soon, these bonds will become strong instruments for engagement between our financial markets.” Narendra Modi

Source: Joint press release UK-India Summit, 12 November 2015, https://www.gov.uk/

“पी बॉ ं ड अपने आप म भारत की आिथरॎक संपनता का एक महवपूणरॎ िमण है और िहंदुतान क े हर नागिरक को इसको गौरव क े प म देखना चािहए और इसको उजागर करना चािहए, तभी तो भारत की ताक़त बढ़ती है“

Narendra Modi

India – UK Finance Partnership

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“Strengthening the economic and financial links between India and the UK is a key priority for the government, and a stable and competitive financial services industry in the UK is an important asset to the UK and to the rest of the world.” Priti Patel, Exchequer Secretary to HM Treasury and the Prime Minister’s Indian Diaspora Champion “London Stock Exchange is one of the premier hubs globally for any financial activity” Arun Jaitley, Honourable Minister of Finance London Stock Exchange has more Indian companies listed on our equity and debt markets than any other international market and provides cutting edge technology to some of India’s leading exchanges. India’s most dynamic companies have access to the world’s largest pool of institutional investment capital here in London.” Xavier Rolet, CEO, LSEG

Roundtable with Railways Minister, 30 October 2015 13 March 2015, international investors roundtable, LSE 18 Nov 2014, IFC Market Open London Stock Exchange

LSEG at the heart of India-UK EFD

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LSEG’s Partnerships

Company New Deals Deal Size Announcement Bharti Airtel Issuance of maiden sterling bond in London £500mm “The bond issue will help Bharti extend maturities and diversify investor base on its debt portfolio” Zyfin and Sun Global Listing the world’s first India fixed income ETF on London Stock Exchange n/a “LSE is the broadest ETF market in Europe. This ETF will give international investors access to the Indian fixed income market, which is worth USD 1.3 trillion and is a vital source of finance for the infrastructure sector” HDFC Issuance of offshore Rupee denominated bonds in London Up to USD 750mm equivalent “There is renewed vigour in the India-UK relationship and HDFC is delighted to announce its intention to list its bonds on London Stock

• Exchange. UK is the global hub for financial services and the

Reserve Bank of India’s guidelines permitting overseas rupee- denominated bonds, will open up a new source of funding for us,” Deepak S. Parekh, Chairman, HDFC Yes Bank Signing of MoU to foster joint collaborations on bond and equity issuance in London, with a strong focus on Green Infrastructure Finance. Up to USD 550mm in Green Bonds and USD 1bn in equity “Both financial institutions will leverage their complementary strengths to facilitate access to capital raising in London and India for Indian entities and will work jointly on the development of a wide range of new products. Through this collaboration both parties also demonstrate their commitment to the promotion of products and platforms supporting the use of Green Finance” SBI-LSEG Construction of “FTSE-SBI India Bonds Indices” to be used initially by a new investment fund run by SBI n/a These indices, to be launched in the first half of 2016, will facilitate investment into India's bond markets and support market liquidity and pricing IRFC Issuance of offshore Rupee denominated bonds in London n/a “We are set to launch a railway bond in London. It is appropriate as the journey of Indian Railways started in he UK” PM Modi Page 5

April 2016 Visit of Minister Piyush Goyal

“Minister of Power and Coal Piyush Goyal, who is on a two-day visit to the UK, visited the London Stock Exchange. During the visit, Goyal met officials from Natgrid and UK Power Network and explained about his plans and vision to increase the power generation in India and renewable energy scale up plan has been drawn up to 2022. According to sources, Goyal emphasised the need for the developed world to show its commitment towards climate change by putting money in climate finance.” Business Standard, 21 April 2016 “In an attempt to raise resources for India’s ambitious green energy programme, state-run firms, such as NTPC Ltd, Neyveli Lignite

• Corp. Ltd, Power Finance Corp. Ltd (PFC), Rural Electrification Corp. Ltd (REC) and PTC India Ltd, plan to issue masala bonds to

raise $1 billion, according to a government statement released on Wednesday.” VCCIRCLE, 20 April 2016 Page 6

India’s financing estimates — India is forecast to be the fastest growing economy in the G20 in 2015 and 2016. — The World Bank has estimated that in this decade alone, India’s infrastructure investment needs could reach USD1.7 trillion1. — The CII has estimated that India’s economy will need USD 4.7 trillion investment over the next 5 years to achieve 7% growth per annum2. Accessing the world’s deepest pools of capital — Financing requirements on this scale can partly be achieved by tapping into the deep pools of capital and international investor base of a world leading global financial centre such as London. Green finance - accessing a wider range of investors — London Stock Exchange (LSE) has the most comprehensive set of green bond segments of any international exchange.

1 http://www.worldbank.org/content/dam/Worldbank/document/SAR/Reducing%20Poverty%20by%20Closing%20South% 202 Asia's%20Infrastructure%20Gap_Web.pdf 2 CII study, September 2014, https://www.mycii.in/KmResourceApplication/42085.StudyonInvestment.pdf

India's financing requirements

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“ The development of a masala bond market would be positive for Indian firms, opening potentially significant new sources of funding.” Fitch Ratings

A competitive environment — Securing the right profile for bond listings is significant in an environment where companies are competing for capital. — Listing in a global market such as London raises a company’s international profile, especially when the

• ffshore market has high international regulatory standards.

— London is home to the deepest global debt capital market with a globally oriented investor base and the deepest global foreign exchange centre. LSE markets are supported by a network of 350 member firms from

• ver 20 countries*1, including banks, agency brokers, market makers and proprietary traders.

Fostering investor confidence — Listing should be encouraged in jurisdictions that meet rigorous criteria on process of listing, disclosure, transparency, and have a consistent, independent document vetting process. — This fosters greater investor confidence and avoids potential conflicts of interest.

*Source: LSEG, as of September 2015

Raising international profile

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Profile: Our issuers benefit from the significant global profile of a London presence as well as access to a deep international investor community. Long Standing Experience: — More than 15,000 debt instruments actively listed on LSE’s fixed income markets — More than £3.5 trillion GBP equivalent raised — Experience working with respected sovereign and quasi-sovereign issuers from over 59 jurisdictions — Over 2,570 International Issuers have issued on our debt markets — Debt issued in 38 currencies Issuer Profile Raising: — PR & Press: debt listings in London are supported by a range of London Stock Exchange marketing and PR initiatives, tailored to suit the needs of issuers. — Market Open: Any high profile issuance can be timed with a Market Opening ceremony and followed by a press release from our Group. High level government officials could also be invited which is also associated with extensive press coverage

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Fixed Income Primary Markets - Prestige

Choice of Markets

Offering issuers flexibility and a choice of high-quality listed markets: — London Stock Exchange’s Main Market and Professional Securities Market (PSM) are both seen as ‘best in class’ among investors — Our fixed income markets also offer a dedicated specialist offering for Islamic finance Sukuk instruments, Green Bonds, Retail Bonds as well as ‘Masala’ and ‘Dim-Sum’ bonds. Innovation: — Green Bonds: a range of dedicated ‘green bond’ segments, offering a flexible range of market models, covering both Regulated Market (RM) and MTF segments, comprising retail and wholesale, and offering the choice of trade reporting, end-of-day and continuous quoting. No other global exchange has such a comprehensive specialist offering for green bonds. — Order book for Retail Bonds: LSE’s flagship retail market allows for both primary issuance and secondary trading of retail denominated bonds and has been growing very popular among issuers of all currencies as an alternative funding source and among investors as the first transparent, regulated investment option of its kind in the UK. Retail bonds can also be held in an ISA, which is a tax-free savings account

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— Sukuk: London Stock Exchange is a key global venue for the issuance of Sukuk bonds. Over $46bn has been raised through 64 Sukuks — Green Bonds: a range of dedicated ‘green bond’ segments, offering a flexible range of market models, covering both Regulated Market (RM) and MTF segments, comprising retail and wholesale, and offering the choice of trade reporting, end-of-day and continuous quoting. No other global exchange has such a comprehensive specialist offering for green bonds. — RMB: London has established itself as the leading western hub for international renminbi. London Stock Exchange is globally the premier listing venue for Dim Sum bonds and the largest renminbi clearing centre outside Greater China — Masala: London Stock Exchange is now the largest Masala bond centre globally with 11 active Indian rupee- denominated bonds listed on our markets. Ever since the first Masala bond listing in London in 2007, we are firmly committed to developing long-term strategic partnerships with issuers to ensure the success of this financing stream and help Masala bonds evolve from a specialist to a mainstream asset class. — Order book for Retail Bonds: LSE’s flagship retail market allows for both primary issuance and secondary trading of retail denominated bonds and has been growing very popular among issuers of all currencies as an alternative funding source and among investors as the first transparent, regulated investment option of its kind in the UK.

Fixed Income Markets - Innovation

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High Regulatory Standards

— UK’s capital markets regulation is based on European Union Directives governing listing documentation, eligibility rules and

• ngoing disclosure requirements.

— UK debt markets’ high standards ensure credibility amongst the global investor base and the UK Listings Authority (UKLA) maintains a reputation for its a robust and balanced approach to implementing the listing rules. — Accessible UK Listing Authority: Named UKLA contacts are now available to support first time Indian issuers and their advisors in discussions related to the issuance of rupee linked bonds in London:

“As the first multilateral Masala issuer

• n the London Stock Exchange, IFC

had a very positive experience working with the UK regulatory authorities over more than 10

• transactions. The listing process was

predictable and overall comparable to listing debt securities in other financial centres. Listing this bond in London has also enabled us to achieve greater visibility with global investors, a core objective for IFC when we raise capital.”

IFC statement, November 2015

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High Regulatory Standards

Predictable UKLA Turnaround times: — Up to 4 clear working days after first submission and subsequent submissions within 2 clear working days. — This applies to plain vanilla debt securities, redemption-linked securities, Medium term note programmes, securitised derivatives and supplementary prospectuses/listing particulars for non-equity securities. — For MTNs, approval for the base prospectus only is required. Subsequent draw-down issues allowed at any time during the 1 year validity period of the prospectus, subject to publication of Final Terms and Prospectus Supplement s(if applicable) by 2pm the day before issue. — UKLA Checklist can be used by issuers prior to submission to avoid delays UKLA Fees: a one-off £ 2,000 Vetting fee is applied (no extra annual or application fees).

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International Competitiveness

Competitive Fee Structure: — LSE fees are calculated on a sliding scale, based on issue size and type of issue. — No fee is payable for setting up an MTN program. — No annual fee is payable in respect of debt securities on the London Stock Exchange’s markets

Face Value (£m) Fee (£) Greater than

• r equal to

Less than 50 2,500 50 100 4,000 100 and above 4,200 Face Value (£m) Fee (£) Greater than

• r equal to

Less than 25 300 25 50 1,750 50 100 2,700 100 500 3,600 500 above 3,650 Eurobonds & International Issuers Issuers under debt issuance programs Page 14

— Over time, with a successful pool of primary market issuance, we believe the infrastructure could be developed to support secondary market liquidity, thereby generating more efficient financing opportunities for Indian corporates. — G20 has committed to developing transparent secondary markets. — Liquid and transparent secondary markets typically reduce the cost of raising debt, as investors are willing to pay a premium for securities with liquid secondary markets1. — Studies consistently underscore that liquidity is an important determinant of the cost of raising capital for

• issuers. For instance, investment banking fees for securities in the most liquid vs. the least liquid quintile differ

by 21%2.

1 Developing government bond markets, World Bank (2001), p.118 2 Stock Market Liquidity and the Cost of Issuing capital (2013) Butler et al.

Developing strong secondary markets

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The development of Indian Fixed Income indices — Indices can be created to allow comparative measuring of bonds - secondary market liquidity is crucial as these indices need to be investable. — The natural evolution is then the creation of ETFs which add a further boost to liquidity, further reducing costs

• f raising capital.

— The world’s first India Fixed Income ETF was launched in London on 19 November 2015. — LSE and SBI are collaborating on the creation of the FTSE SBI Indian Bond Index.

Developing strong secondary markets (2)

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Secondary Market Trading and Pricing

Deep, Liquid Bond Markets: — Bond markets are moving away from less transparent OTC trading towards more liquid platform trading — LSEG has developed highly liquid and transparent electronic fixed income order books that allow for both primary and secondary access and trading to international investors — LSE’s fixed income order books offer a range of secondary market solutions, from OTC-style trade reporting to end-of-day pricing to fully electronic continuous market maker quoting — These include order books for some of the largest government bond markets in the world. — 70% of global secondary market bond trading takes place in London

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— The London market can over the medium to long-term facilitate the development of liquidity in secondary market without undermining the crucial role of Indian markets in pricing credit. — Core price formation for Indian credit remains in the Indian market as the London time zone trades a number of hours after the Indian market opens. — A thriving Masala bond market in London would not compete with the Indian market in the Asian time zone, but would ensure continuous global trading conditions and support more efficient pricing.

Complementary Markets

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London Market Overview

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The London advantage

29 July 2016 London Stock Exchange Group Page 20 Internationally focused open market culture 20% of global hedge fund assets managed in London, 75% of the European HF market Leading global centre for international eurobond issuance Leading foreign exchange trading centre with 37% of global turnover The key global centre for fixed income innovation, as demonstrated by fast growing Sukuk and RMB markets World’s largest pool of international equity assets Largest centre for international banking, with 18% of cross- border lending Leading global investment banking centre

London Stock Exchange Group operates at the heart of the world’s financial centre. Working with us gives our customers unique access to the global connectivity of the City

• f London.

2,012 1,050 576 357 302 301 272 271 252 215 194 London New York Oslo Toronto Paris Amsterdam Tokyo Frankfurt Zurich Stockholm Hong Kong

London has the largest pool of investors dedicated to international companies.

London’s investment pool

London Stock Exchange Group Page 21

International equity assets under management by financial centre 2015 ($bn)

Source : Factset

Prestige of a globally respected exchange Source of non-bank financing for companies looking to diversify their fund streams High Regulatory standards Professional, consistent, efficient and fast Competitive costs - no annual fees Home to the common language of Eurobonds - Quoted Eurobond exemption Secondary market trading capabilities Internationally focused open market culture World’s largest pool of international equity assets Long-standing globally oriented investor base Leading global centre for international Eurobond issuance Largest centre for international banking, with 18% of cross-border lending Key global centre for fixed income innovation (Green Bonds, RMB, Sukuk, Masala Bonds) 20% of global hedge fund assets managed in London, 75% of the European HF market

Why consider a Listing Benefits of London

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Benefits of Listing in London

Source : Factset

Top 50 UK investors’ holdings, by region

— London, more than any other financial centre, offers a long- standing globally oriented investor base — UK investors have diversified portfolios and are used to supporting companies’ international development — Institutional investors in the other major listing venues tend to be more domestically focused — Global investment portfolios ensure that investors appropriately value businesses with a global profile and aspirations

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London attracts diversified global investors

12%

Asia Pacific

2%

Latin America

15%

EMEA (ex UK)

26%

North America

45%

LSEG trading markets

London Stock Exchange Group Page 24

LSEG operates a range of world class regulated trading markets and MTFs covering various asset classes and products.

Equities Debt Derivatives & Commodities

London Stock Exchange Borsa Italiana Turquoise The pan European MTF AIM The world’s leading SME market European leading ETF market venue Specialist Fund Segment Professional Securities Market London Main Market MTS Europe’s leading market for of government fixed income MOT World’s leading retail bond market ORB The UK retail bond market EuroTLX The first European retail bond MTF London Stock Exchange Derivatives Large range of UK, IOB DR and Norwegian single stock options and futures IDEM Italian Equity Derivatives Markets derivatives IDEX Energy Commodity Derivatives AGREX Durum Wheat Futures

Not all markets shown

Our World-Leading International Equity & Debt Markets

Deepest pool of international capital in the world

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Equities Debt 2,200+ listed companies with aggregate market

value of $7 trillion

500+ international companies with a combined

market value of $3.7 trillion, 45 of which are from Middle East

172 Oil & Gas companies with total market value

• f $1.2 trillion

$914bn raised in last 10 years from

2005 - 15

15,000+ debt securities listed on LSE Main

• Market. Overall money raised exceeds £3.5 trillion

375+ international government bonds from 34

different countries in 11 different currencies

$338bn+ raised by sovereign, regional and local

governments on LSE

64 sukuk bonds have raised $46 billion

Leading centre for RMB issuance outside China

Debt Markets

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— London Stock Exchange is one of the world’s major centres for issuing and listing of all types of debt securities — London is the leading global centre for international eurobonds – London-based firms account for 60% of the primary market and 70% of the secondary market — 1,700+ bonds were issued on London Stock Exchange’s debt markets in 2015, raising more than $421billion equivalent, in 24 different currencies. — London-listed Eurobonds give international governments and companies, the opportunity to integrate into global financial markets, using London as a gateway to access an international pool of capital. — Range of secondary market solutions, from OTC-style trade reporting to end-of-day pricing to fully electronic continuous market maker quoting

Sources: LSE internal data, CityUK Bond Report

Debt markets overview

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A choice of debt-listed markets

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— Listed, Exchange-Regulated — No requirement for full Prospectus, only Listing Particulars necessary — Subject to Chapter 4 of the Listing Rules — Admission of ‘wholesale’ securities only — Listed, EU-Regulated Market under MiFID — Full Prospectus required — Securities subject to Chapters 2 and 17 of the UK Listing Rules — Admission of both ‘wholesale’ and ‘retail’ bonds

Main Market Professional Securities Market Eligibility requirements for both markets:

Minimum value of issue of £200,000 Free transferability of debt securities All Securities of same class to be listed

Benefits of Professional Securities Market

PSM offers greater flexibility for issuers in terms of documentation required (listing particulars rather than full prospectus) and continuing disclosure obligations. Because London Stock Exchange’s PSM has full ‘listed’ status, it offers companies all the benefits of admission to the UKLA’s Official List. — Outside scope of EU Prospectus and Transparency Directives — Designed to meet financing needs of issuers who do not require EU passport — Offers alternative for issuers not wishing to prepare financial information to IFRS, and ability to report under national GAAP — Distinction between wholesale and retail does not apply, which allows securities to be issued in denominations lower than €100K but under the wholesale regime — Offers full listed status but with lower levels of disclosure and continuing obligations than what would be required on EU-Regulated Main Market — Offers a number of secondary market order-book solutions while providing access to London’s deep pool of international eurobond liquidity — Offers cost savings as London is the only major European listing venue with no annual fees to debt issuers

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Summary of Options - Next Steps

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Primary Markets Listing

— Main Market — Professional Securities Market

Secondary Market – Admission to trading

— OTC ‘trade-reporting only’ segments — OFIS electronic segments

• ffering either end-of-day pricing
• r continuous on-screen market

maker tradable liquidity

Exchange Admission documents required:

— Electronic copy of Prospectus/Offering Circular/Pricing Supplement/Final Terms documentation — Copy of relevant Board Minutes — Copy of Regulated Information Service, e.g. RNS, announcement relating to the admission — Written confirmation of the number of securities to be issued — Completed Exchange Form 1

London Stock Exchange’s Capital Markets Days facilitate face-to- face, scheduled dialogue between companies and institutional

• investors. This is usually done to

highlight a specific region or sector focus. Our central position within the London financial markets offers an unbiased arena in which to bring together select groups of companies with the most extensive possible network of appropriate potential investors.

Format

Market Opening: Unique opportunity for all companies, dignitaries and sponsors are invited to

• pen London’s market at 08:00 on the day of the event. This is filmed and can be accessed by

international TV stations broadcasted in their relevant regions. A photographer is also present. Presentations: Welcome by a senior executive of the London Stock Exchange, giving an

• verview of the market/sector. Summary of the IPO process by top City advisors and investors.

Each company will have an opportunity to explain its investment story. 1-2-1 meetings: Highly targeted individual meetings pre arranged by the Exchange. Each company has its own private meeting room the entire day which is fully equipped with all AV capabilities. Maximising exposure: With support from LSEG press team with organisations such as the BBC, The Wall Street Journal, the Financial Times, CNBC & Sky News.

London Stock Exchange Capital Markets Days

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Masala Bonds on London Stock Exchange

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London Stock Exchange is now the largest Masala bond centre globally. Ever since the first Masala bond listing in London in 2007, we are firmly committed to developing long-term strategic partnerships with issuers to ensure the success of this financing stream and help Masala bonds evolve from specialist to a mainstream asset class.

“IFC issued the bonds in London to leverage the city’s standing as a premier financial centre. The vast majority of investors are European insurance companies.” , Nov 2014, IFC press release for INR 10bn, 10year 6.3% bond “Addressing climate change is a priority for IFC in India. IFC’s green Masala bond demonstrates the powerful role of capital markets in mobilizing savings for climate finance—and a listing in London allows us to attract the widest possible range of international investors“ August 2015, IFC press release for INR 3.15bn Green Masala Bonds “In response to strong investor demand, IFC increased the bond from 10 billion to 16 billion rupees. The overwhelming majority of investors are asset managers in Europe and North America.” Apr 2015,IFC press release for INR 16bn, 3year 6.45% bond

13 August 2015, IFC & Yes Bank Market Open, LSE

London Stock Exchange’s Global Reach

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— 12 bonds denominated in Indian rupees are listed on our markets. Historically, 30 INR bonds have been listed in London with Supranationals, Sovereign and Agencies (SSA’s) have become repeat INR issuers over the years – those include Inter- American Development Bank, European Bank for Reconstruction and Development and International Finance Corporation — 4 new Masala bonds were listed on London Stock Exchange’s markets in 2015 and 9 in 2014 — Following the Reserve Bank of India's revisions to the External Commercial Borrowing framework in April 2015, LSE stands ready to support first-time Masala bond issuers with India-dedicated resources, as well as the unique experience and network it has built up at the heart of London’s financial community over the years. — LSE’s broad range of bond markets can accommodate the debt listings of companies reporting in either Indian GAAP or IFRS. Indian GAAP is and will remain eligible for listing on the Professional Securities Market (PSM). — LSE’s offering consists of a flexible range of market models, covering both Regulated Market (RM) and MTF segments, retail and wholesale, and offering the choice of trade reporting, end-of-day and continuous quoting.

Listing Venue of Choice for Masala bonds

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12

Bonds denominated in Indian rupees are listed on our markets.

30

Historically, 30 INR bonds have been listed in London with Supranationals, Sovereign and Agencies.

Masala bonds on London Stock Exchange

Indian Rupee Bonds on the Main Market Issuer Issue Date Size (INR) Tenor

HDFC 7.875% 08/21/2019 21-Jul-16 30,000,000,000 3yrs IFC 7.1% 03/21/31 21-Mar-16 2,000,000,000 15yrs EBRD 6.4% 03/04/19 04-Mar-16 5,000,000,000 3yrs IFC 6.45% 30/10/2018 10-Aug-15 3,150,000,000 5yrs IFC 6.45% 30/10/2018 30-Apr-15 18,000,000,000 3.5yrs EBRD 5.1% 02/02/17 02-Feb-15 3,111,000,000 2yrs IFC 6.3% 25/11/24 18-Nov-14 10,000,000,000 10yrs EBRD 5.625% 15/03/17 28-Oct-14 5,500,000,000 2.5yrs EBRD 5.75% 19/03/18 19-Sep-14 3,000,000,000 3.5yrs IDB 6% 05/09/17 05-Sep-14 8,500,000,000 3yrs IDB 6.1% 02/09/16 02-Sep-14 4,000,000,000 2yrs IDB 8.25% 15/05/17 15-May-07 1,500,000,000 10yrs

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The Current Status of the Masala Bond Market: London Stock Exchange listings

Number of Masala bonds listed 30 (12 active) Number of Masala bond issuers 6 ( 4 active) Capital Raised in INR (USD equivalent) $ 3.42 billion Active issuance maturities (from issue date) 15y, 10y, 5y, 3.5y, 3y Secondary market Order book trading, continuous market making, end-of-day pricing, and trade reporting only Avg cpn across maturities (active Masala bonds) 6.08% Avg coupon 5y maturity (active Masala bonds) 6.45% Avg coupon 3y maturity (active Masala bonds) 6.2% Total number of bonds listed on LSE (active) 17,119 Number of jurisdictions 66 Number of currencies 38 Total sovereign* bonds on market 1,186 bonds, from 41 jurisdictions in 29 currencies

Source: Bloomberg and LSEG. Averages are arithmetic means of one or more coupons. This does not constitute investment advice. Includes supranationals

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London Stock Exchange’s Global Reach

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“Destination LSE for listing bonds”

Financial Chronicle

“All bonds lead to London

[,,,] The bourse there has become the

preferred location for the Indian entities, government and private, to raise new forms of debt finance.”

Business Standard

“Prime Minister Narendra Modi’s invocation

• f James Bond at Wembley seems to have

given swagger to the Indian bond issuers planning to tap London’s market.”

Business Standard

“The development of a masala bond market would be positive for Indian firms, opening potentially significant sources

• f funding.”

Fitch Ratings

“Rupee-denominated bonds help to reduce borrowing costs by at least 150-200 basis points compared with domestic fund-raising avenues because the exchange rate risk is shifted to the buyers.”

The Economic Times

“George Osborne: Masala Bonds are recipe for India projects.”

Evening Standard

Case Studies

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Company Details

Company Housing Development Finance Corporation (HDFC) Market Main Market Sector Financials Rating AAA/A1+*

Transaction Details

Issue Date 21 July 2016 Issue Size INR 30 billion Coupon 7.875% Maturity 37 months

Company profile

— HDFC is a leading provider of Housing Finance in India — The company also has a presence in banking, life and general insurance, asset management, venture capital and education loans — Founded in 1977 as the first specialised mortgage company in India — HDFC’s distribution network spans 396

• utlets which cater to approximately 2,400

towns and cities spread across India

Debt issuance story

— Represents the world’s first Masala bond issued by an Indian corporate — The issue was 4.3 times oversubscribed and paves the way for the opening of the Masala bond market globally to support Indian company and infrastructure financing — Distribution: 86% taken by Asian investors and 14% by European investors; Institutional investors made up 82% and private banks 18% — Joint Leads: Axis Bank Ltd, Credit Suisse and Nomura.

HDFC is first ever Indian corporate to list Masala bond, chooses London Stock Exchange for landmark issuance

Case Study

“This is a milestone transaction for HDFC. We have achieved our objective of attracting a global pool of capital to diversify our borrowing profile, The positive investor response towards this issuance reinforces the blue-chip positioning of HDFC, and establishes a significant benchmark for Indian companies” said HDFC chairman Deepak Parekh.

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Company Details

Company Axis Bank Dubai Market Main Market Sector Financials Rating Baa3/BBB-

Transaction Details

Issue Date 01 June 2016 Issue Size USD 500 million Coupon 2.875% Maturity 5 years

Company profile

— Axis Bank is India’s third largest private bank — “Axis Bank launched and successfully completed the first certified Green Bond issue, the issue we are pleased to list on the London Stock Exchange today. The encouraging response to this issue is reflective of the keenness of global investors to promote and support a sustainable environment and also acknowledge Axis's credibility in this space. The ease of the listing process and breadth of investors seen in this bond issuance demonstrates the role London Stock Exchange can play in supporting India's financing needs.”

Debt issuance story

— The proceeds of the bond will be invested in green energy, transportation and infrastructure projects, reinforcing India’s commitment to produce 175,000 MW of renewable power by 2022. — Lowest coupon ever for a 5-year USD bond by any Indian private sector issuer. — First ever USD green and 144A bond by an Indian private sector company — Joint Leads: Axis Bank SGP, BAML, Citigroup Global Markets SGP, Credit Agricole CIB HK, HSBC Ltd, JP Morgan Securities Plc, Standard Chartered Bank

India’s first internationally listed certified green bond

Case Study

Geographical Distribution

Asia 48% Europe 25% U.S. 16% Middle East 11%

Distribution by Investor

Banks 30% Asset Managers 55% Private Banks 5% Sovereign wealth funds/pension funds 10%

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Company Details

Company European Bank of Reconstruction and Development (EBRD) Market Main Market Sector Supranational Rating AAA / Aaa

Transaction Details

Issue Date 4 March 2016 Issue Size INR 5 billion Yield at issue 6.4% Maturity 3 years

Company profile

— EBRD is a multilateral developmental international financial institution founded in 1991 that uses investments as a tool to build market economies. Initially focused on the countries of the former Eastern Bloc it expanded to support development in 30 countries from central Europe to central Asia. — The EBRD is owned by 65 countries and two intergovernmental institutions (EU and EIB). It maintains a close political dialogue with governments, authorities and representatives

• f civil society and works in cooperation with

international organisations such as the OECD, the IMF, the World Bank and UN specialised agencies.

Debt issuance story

— Sole arranger: HSBC — The European Bank for Reconstruction and Development has been a key issuer of Indian Rupee denominated bonds in London. — EBRD has raised more than $729m equivalent on the London market, through six INR denominated issues with tenors of one, two, three and four years.

Using offshore rupee bond issuance as part of a multi- currency EUR 35bn GMTN Programme

Case Study

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— Inter-American Development Bank was the first issuer of an Indian Rupee denominated bond in London in

• 2007. This was the first ever non-deliverable Indian rupee-denominated bond, cash settled in dollars using

prices in the non deliverable forward market for Indian rupees. — Over the years, IDB has raised more than $275m equivalent on LSE, through 6 INR denominated issues with tenors of one, two, three and ten years. — The IDB, established in 1959, is a supranational financial institution that uses the resources it raises in capital markets to support programs that promote development and economic growth while respecting and protecting the environment. — Key initiatives for the progress of its borrowing member countries include the modernization of infrastructure, development of alternative energy sources, and universal access to clean water and sanitation.

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— In 2014, IFC moved its Treasury function to London. — In November 2014 International Finance Corporation issued a ten year, 6.3% triple-A rated masala bond, raising Rs 10 billion and paved the way to increase foreign investment in India, mobilising international capital markets to support a subsequent infrastructure bond issuance by Axis Bank. — In April 2015, IFC issued a three-and-a-half year, 6.45% bond that raised Rs 16 billion – the largest ever Rupee denominated bond issued outside India. — The program is reflective of the strong partnership between India and IFC. In 2014 IFC committed $1.4 billion in India along the strategic priorities of promoting inclusive growth, particularly in India’s low income states, addressing climate change, and supporting economic integration.

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Page 43 5.00% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% 3 5 7 9 11 13 15

Yield Maturity (years)

IFC Offshore Rupee Yield Curve

IFC Offshore bond level

IFC had been issuing in the offshore markets at approximately 90 -190 bps below the Government of India

• nshore yield (at time of issuance). Through the Masala bond

program, IFC has been able to offer clients in India attractive levels of funding and has invested INR 55.1Bn ($860mm equivalent) in the Indian private sector.

Company Details

Company International Finance Corporation (part of World Bank Group) Market Main Market Sector Supranational Rating AAA / Aaa

Transaction Details

Issue Date 21 March 2016 Issue Size INR 2 billion Yield at issue 7.1% Maturity 15 years

Company profile

— IFC is one of the world’s largest financiers of climate-smart projects for developing countries, investing about $11 billion in long-term financing over the last decade for renewable power, energy efficiency, sustainable agriculture, green buildings and private sector adaptation to climate change. — “IFC’s 15-year masala bond demonstrated long-term investor confidence in India’s growth,” said Navtej Sarna, Indian High Commissioner to the United Kingdom. “Innovative financing mechanisms like IFC’s Masala program are critical to mobilize long- term funding for India’s infrastructure expansion.”

Debt issuance story

— Sole arranger: JP Morgan — Proceeds of the bonds will be used to advance private sector development in India. — It marks the longest-dated offshore rupee bond to be issued globally. — The latest 15-year bonds mark the latest step in IFC’s efforts to extend the yield curve and set a pricing benchmark for future issuances with similar maturities. IFC has previously issued Masala bonds in maturities of three, five, seven and ten years.

Using offshore rupee bond issuance to finance private sector development in India

Source: IFC press release, LSEG database, March 2016

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Company Details

Company International Finance Corporation (part of World Bank Group) Market Main Market Sector Supranational Rating AAA / Aaa

Transaction Details

Issue Date 18 Nov 2014 Issue Size INR 10 billion Yield at issue 6.3% Maturity 10 years

Company profile

— IFC, a member of the World Bank Group, was established in 1956 and it’s owned 184 member countries. It finances and provides advice for private sector ventures and projects in developing countries in partnership with local private entities — IFC is the largest global development institution focused exclusively on the private sector in developing countries. — IFC’s mission is to allow companies and financial institutions in emerging markets to create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities

Debt issuance story

— Sole arranger: JP Morgan — The bonds were priced 200bps inside equivalent bonds issued by the Indian Government — The bonds’ principal amounts are linked to the Indian rupee exchange rate. U.S. dollar proceeds from the bonds will be converted to rupees in the domestic spot exchange market. — Vast majority of investors were European insurance companies — Proceeds from the offering used to support an infrastructure bond issuance by Axis Bank

Source: IFC press release, LSEG database, November 2014

Using offshore rupee bond issuance to finance Indian infrastructure

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Company Details

Company International Finance Corporation (part of World Bank Group) Market Main Market Sector Supranational Rating AAA/Aaa

Transaction Details

Issue Date 10 Aug 2015 Issue Size INR 3.15bn Yield at issue 6.45% Maturity 5yr

Company profile

— IFC is one of the world’s largest financiers of climate-smart projects for developing countries, investing about $11 billion in long-term financing

• ver the last decade for renewable power,

energy efficiency, sustainable agriculture, green buildings and private sector adaptation to climate change. — “Addressing climate change is a priority for IFC in India. IFC’s green Masala bond demonstrates the powerful role of capital markets in mobilizing savings for climate finance—and a listing in London allows us to attract the widest possible range of international investors. Adding the rupee as a new green bond currency also supports our goals to strengthen this important asset class.”

Debt issuance story

— Sole arranger: JP Morgan — Proceeds from the offering used to finance a green bond issued by Yes Bank, one of India’s largest commercial banks. Yes Bank invested the proceeds of its bond in renewable energy and energy efficiency projects, mainly in the solar and wind sectors. — Under its $3 billion offshore rupee Masala bond program, IFC has issued bonds worth

• ver 103 billion rupees ($1.66 billion) in a

range of tenors, building a triple-A yield curve and attracting new investors to the London

• ffshore rupee market.

Using Green offshore rupee bond issuance to finance Indian infrastructure

Source: IFC press release, LSEG database, August 2015

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Disclaimer

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Contact us

Fixed Income Team Lillian Georgopoulou Email: egeorgopoulou@lseg.com bonds@lseg.com Tel: +44 (0)20 7797 3482 / +44 (0)20 7797 3921

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