Masala Bonds Trusteeship

  • Masala bonds are bonds issued outside India by an Indian entity or corporate but denominated in Indian Rupees, rather than the local currency. Indian corporates usually issue Masala Bonds to raise funds from foreign investors. Masala is an Indian word and it means spices. The term was used by the International Finance Corporation (IFC) to evoke the culture and cuisine of India.
  • Many Corporates in India (Issuers), based on lower interest rate scenarios in foreign countries as well as conversion rates of currency favor the Masala Bond (ie, Rupee Denominated Bonds issued outside India) for raising debt resources.
  • ITSL acts as a Masala Bond Trustee (Domestic Security Trustee) to maintain the domestic collaterals, as applicable for the interest and benefit of foreign Note Trustee/bondholders as per the Transaction Document.