India's first debt issue with NaBFID's credit enhancement set to launch in July, sources say

MUMBAI: India’s infrastructure lender National Bank for Financing Infrastructure and Development (NaBFID) will provide its first partial credit enhancement for Think Gas Ludhiana’s planned 6.2 billion rupee ($65 million) bond sale this month, two sources said on Monday.

The sources declined to be identified because they were not authorised to speak to the media. Think Gas Ludhiana did not respond to a Reuters email seeking comment.

The deal will be the first to use NaBFID’s partial credit enhancement facility, a government-backed programme designed to help infrastructure projects raise more long-term funding through the bond market.

The facility covers part of any principal or interest shortfall, improving a bond’s credit profile and making it more attractive to investors such as insurers and pension funds.

NaBFID has sanctioned the first case for credit enhancement, and the company can now go for a bond sale with enhanced rating, Managing Director Rajkiran Rai told Reuters, without confirming other details about the issue.

“Once this model works, we will push other A-rated companies to go for bond issuances as the ultimate aim is to generate funds for long-term infrastructure projects through bonds. We will be involved in the initial phase till the cash flow stabilises,” the managing director added.

The notes are rated AA+ (CE) by CARE Ratings and India Ratings after the credit enhancement, up four notches from their standalone rating of A.

“The proposed NCDs are supported by the PCE provided by NaBFID, in the form of an unconditional and irrevocable non-fund-based limit sizing 43% of the proposed NCD amount. The PCE covers both principal and interest payments of NCDs,” CARE Ratings said in a note.

NaBFID had launched this facility in September 2025, but will go ahead with the first deal after a gap of nearly 10 months.