(Bloomberg) -- Housing Development Finance Corp., India’s largest mortgage lender, raised 30 billion rupees ($449 million) from the nation’s first Masala bond sale, opening the way for other domestic issuers to tap the nascent offshore rupee debt market.

HDFC sold the three-year, one-month notes at a yield equivalent to 8.33 percent annually, according to a person familiar with the matter who is not authorized to speak publicly and asked not to be identified. This compares with the 8.38 percent it is said to pay on its planned three-year onshore bonds. Yields on India’s three-year rupee-denominated debt, rated AAA, have fallen 15 basis points to 7.89 percent this month, according to data compiled by Bloomberg.

The Reserve Bank of India in September allowed domestic companies to issue offshore rupee bonds to reduce dependence on foreign currencies including the U.S. dollar. A number of companies have approached banks and gone on roadshows to use this new avenue to raise funds, though Mumbai-based HDFC is the first Indian issuer to complete a sale. Issuance volume in the offshore yuan dim sum market has been 98 billion yuan ($15 billion) so far in 2016, according to data compiled by Bloomberg.

HDFC’s Executive Director V Srinivasa Rangan wasn’t immediately available for comment on Thursday.

HDFC’s senior, unsecured notes will pay a semi-annual coupon of 7.875 percent, the person familiar with the offering said. Bookrunners to HDFC’s issuance were Axis Bank Ltd., Credit Suisse Group AG and Nomura Holdings Inc.

The Washington-based International Finance Corp. in 2013 became the first issuer of offshore rupee bonds and has since been a regular seller of such securities. Local companies though have faced some resistance from investors demanding a premium to invest in Masala bonds, named after the spices found in Indian curries

Bonds issued in local currencies overseas, such as China’s dim sums, are sometimes favored by funds reluctant to venture into unknown markets.

NTPC Ltd., India’s largest power producer, mandated five banks for a planned green Masala bond, a person familiar with the planned offering said June 20. The company’s first issuance may be as much as $250 million, Finance Director Kulamani Biswal said in a phone interview the same day. NTPC’s spokeswoman Deepna Mehta didn’t reply to an e-mail seeking comment on the company’s Masala debt plan.

Rural Electrification Corp., a state-owned lender to electricity projects, sent a request for proposals to banks last month for a planned $200 million Masala bond, a person familiar with the matter said June 13. Finance Director Ajeet Agarwal said the company is yet to appoint banks to manage the sale.

--With assistance from Rajesh Kumar Singh To contact the reporter on this story: Anurag Joshi in Mumbai at To contact the editors responsible for this story: Neha D'silva at, Candice Zachariahs

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