New Delhi: Mortgage lender Housing Development Finance Corp. Ltd (HDFC) on Thursday said the Province of British Columbia has subscribed the entire of its second tranche of ₹ 500 crore rupee denominated overseas bonds.

“The Corporation has closed the said issue on September 1, 2016. The entire issue has been subscribed by The Province of British Columbia," it said in a regulatory filing.

The bonds issued will yield a return of 7.5% per annum, which is to be paid semi-annually.

The maturity will be one 9 January 2020. The third issue of the rupee denominated bonds overseas, popularly known as masala bonds, worth ₹ 1,000 crore was opened earlier on Thursday.

HDFC’s first masala bonds issue in July had helped the corporation raise ₹ 3,000 crore through these rupee denominated bonds.

The rupee-denominated bonds or masala bonds are instruments through which Indian entities can raise funds by accessing overseas capital markets, while the bond investors hold the currency risk.

HDFC is also the first Indian corporate issuer of rupee denominated bonds overseas pursuant to applicable RBI guidelines.

This is a rupee-based transaction and there is no foreign exchange exposure and bonds will be listed on the London Stock Exchange and cannot be traded in the local Indian market.

HDFC will use the issue proceeds for the housing finance business as well as for general corporate purposes. Stock of the company closed 1.12% higher at ₹ 1421.90 a piece on BSE.

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