NaBFID's New Bond Move: Transforming Infrastructure Funding through Partial Credit Enhancement

The NaBFID CEO announced that the partial credit enhancement facility for corporate bonds, revealed in the 2025-26 Budget, aims to operationalize in April. This facility is crucial for infrastructure by improving bond ratings, enabling corporates to access capital more affordably from the bond market.

NaBFID will launch a partial credit enhancement facility for corporate bonds in April, as revealed by its managing director, Rajkiran Rai G. This facility, highlighted in the Budget 2025-26, seeks to advance the bond market by upgrading bond ratings, allowing corporates to secure funds on improved terms.

This facility plays an essential role in infrastructure projects by facilitating cheaper fund mobilization. Rai, in an interview with PTI, mentioned that both the structure and government announcements are aligned to support this initiative, gearing up NaBFID for an impending product rollout.

NaBFID is actively collaborating with multilateral development banks for this initiative but plans to proceed independently if needed. Rai indicated that alongside municipal bonds, which often suffer from sub-investment-grade ratings, such enhancement could uplift ratings, making them attractive investments for banks and insurance corporations.