Mumbai: India’s biggest issuer of offshore rupee bonds sold the first masala note by a local company in half a year, after the government relaxed taxation on overseas borrowings and the Indian currency rebounded in recent weeks.

Housing Development Finance Corp. raised 500 crore ($70 million) via a sale of five-year 8.75% notes, it said in an exchange filing. That was higher than the coupon of 6.73% the nation’s largest mortgage lender offered when it previously sold masala debt a year ago.

The firm is returning to the market after the finance ministry withdrew tax payable on offshore rupee bonds in September, in an attempt to attract foreign investment to boost Asia’s worst-performing major currency. The rupee has recovered since October but has still weakened 10.5% this year, weighed down by the increase in crude oil prices and a wider emerging-market rout.

The market for masala notes, which are rupee securities sold abroad, may draw issuers at a time when liquidity is tight domestically. That’s a result of a surprise default by Infrastructure Leasing & Financial Services Ltd (IL&FS).

“There’s reasonably good appetite for masala bonds now and we will raise more funds via this channel whenever the opportunity presents itself," said Keki Mistry, chief executive officer at the company, in a phone interview. “Liquidity in local markets is still tight even though it has eased a little since the IL&FS fiasco."

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HDFC has raised a total of 10,100 crore through masala bonds since its first issue in July 2016, according to estimates provided by the company.

Dewan Housing Finance Corp. was the last Indian company to issue such notes, in April, according to data compiled by Bloomberg. Masala bonds issued from September 17 to March 31 of 2019 shall be exempt from tax, under the government measure.

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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.