THIRUVANANTHAPURAM: The Kerala Infrastructure Investment Fund Board (KIIFB), the first state government agency to debut in the international debt market, has floated masala bonds w0rth upto Rs 2,150 crore.The transaction was priced on March 26 and saw strong participation from a wide spectrum of investors which included asset managers, insurance companies, pension funds, banks and private wealth managers.Till date, the masala bond market had seen issuance only from large corporates and public institutions like National Highway Authority of India (NHAI) and National Thermal Power Corporation (NTPC) which are all rated AAA in the domestic market. The deal is also significant for the state as the international investors have shown faith in a credit backed by a sub-sovereign from the emerging markets for the first time."This is a milestone transaction. KIIFB is the first sub-sovereign entity in India to access the international debt capital markets in this manner," KIIFB chief executive officer and former chief secretary K M Abraham said. "This issue has also helped to showcase the unique strengths of Kerala in front of a wider global audience and help garner international investments to the state. This transaction has realised our objective of diversifying our sources of funding by accessing capital from international investors," he added.Principal secretary (finance) and deputy managing director of KIIFB Sanjeev Kaushik said that the deal was significant for KIIFB as it would help diversify its sources of funding, and given the large mandate entrusted by the government, it was imperative for the board to identify new avenues. "The successful closing of this deal is also a recognition of fundamental robustness of the Kerala economy and the development model adopted by the state by international investors," he said.At present, projects worth Rs 39,700 crore have been sanctioned under KIIFB. Other than its attempts to borrow funds from outside, what comes normally to KIIFB are the motor vehicle taxes and petroleum cess that comes to almost Rs 1,200 crore every year.The KIIFB has cleared as many as 469 projects till date, of which 229 projects have been tendered, and in 178 projects, work has been started.

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