Will foreign banks be the saviour for Exim?

Investors were informed that Export-Import Bank of India hired Barclays and Citigroup to sell yen-denominated bonds maturing in five years. The two arrangers expect to start the sale this week and haven't yet planned any investor presentations.

State-owned Export-Import Bank, which lends to support foreign trade, is raising funds to meet demand as companies in India increase sales to overseas markets. Indian exports rose 25 percent to $101 billion in the year ended March 2006, exceeding a target of $92 billion. The government aims to boost overseas sales to $165 billion by March 2010.

The bank's senior unsecured debt is rated Baa3, the lowest investment grade, by Moody's Investors Service. Standard & Poor's rates the bank's long-term foreign issues BBB-, its equivalent level.

Is the target of 165 billion over ambitious? Will bringing in reputed foreign services help raise Exim’s ratings?