Bonds Current Affairs - 2019
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China-led Asian Infrastructure Investment Bank (AIIB) is planning to issue its first US dollar-denominated bond with minimum worth of $1 billion by June 2018.
The earliest issuance window of bond will be toward end of first half of 2018 with time required for certain procedures, including Board of Governors’ approval of AIIB’s 2017 financial statements as well as borrowing and swap documentation.
The minimum size of the issuance will be one billion dollars, but as demand for the first bond issue may increase AIIB anticipates of having to issue a larger size.
The maturity of the bond will be between three and five years depending on investor demand at the time. he bank plans to cap its total borrowing volume at US $3 billion dollars in 2018.
The AIIB has received three top-notch ratings from global credit rating agencies S&P Global Ratings, Moody’s and Fitch in recognition of the bank’s strong capital base and stable outlook.
Asian Infrastructure Investment Bank (AIIB)
AIIB is a multilateral development bank initiated by China. Its purpose is to provide finance to infrastructure development and regional connectivity projects in the Asia-Pacific region. Its goals are to boost economic development in Asia-Pacific region, provide infrastructure, and promote regional cooperation and partnership.
It prioritises investment in energy, power generation, transport, rural infrastructure, environmental protection and logistics in Asia. It was officially established in December 2015 and opened for business in January 2016. It is headquartered in Beijing. It has an authorised capital of US $100 billion. So far it has 84 members including India.
China is the largest shareholder of AIIB with 26.06% voting shares. India is the second largest shareholder with 7.5% followed by Russia 5.93% and Germany with 4.5%.
The Inland Waterways Authority of India (IWAI) has raised Rs. 660 crore as Fully Serviced Bonds. The oversubscribed bonds were issued through e-bidding on BSE Portal and the entire amount of Rs.660 crore was raised in single tranche at a coupon rate of 7.47%.
The proceeds from these bonds will be utilized by IWAI exclusively for capital expenditure for development of National Waterways (NWs) under National Waterway Act, 2016 during 2017-18. The principal and interest on these bonds will be financed by budgetary provisions in demand for grants of Ministry of shipping. The interest payment will be on semi-annual basis and the principal on maturity. Prior to raising bonds, IWAI had engaged arrangers, credit rating agencies, registrars and trustees. Both CRISIL and CARE rated proposed bonds of IWAI as “AAA: STABLE”.
Inland Waterways Authority of India (IWAI)
IWAI is the statutory body in charge of the waterways in India. Its headquarters is located in Noida, UP. Its main function is to build the necessary infrastructure in the inland waterways, surveying the economic feasibility of new projects and also carrying out administration and regulation.