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Debt Capital Markets

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Posted by Pallavi Gopinath Aney and Prashanth Venkatesh of Baker & McKenzie.Wong & Leow.

Following IFC’s rupee denominated offerings (and the considerable success of such offerings), on 29 September 2015, the Reserve Bank of India (RBI) amended the External Commercial Borrowings (ECB) policy to set out rules for the issuance of rupee-denominated bonds overseas.

These amendments should be read together with the RBI’s new framework on ECBs announced on 30 November 2015. Our client alert on the new ECB framework is available here.

Recent development

On November 27, 2015, the Capital Markets Board (the “CMB”) published draft amendments to the current Debt Instruments Communiqué (the “Draft Communiqué”). Under the Draft Communiqué, issuers will be required to demonstrate greater financial strength than previously required or, alternatively, provide payment guarantees. The Draft Communiqué is available on the CMB’s website for public comment until December 18, 2015.

The South Africa debt capital market has grown exponentially over the last ten years with reported turnovers on fixed-income securities trading on the Johannesburg Stock Exchange escalating from below ZAR10 trillion (approx. US$961 billion) in 2004 to a record of almost ZAR23 trillion (approx. US$2.2 trillion) by the end of 2013. The South African debt market is liquid and well developed in terms of the number of participants and their daily activity with approximately ZAR25…