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REC Limited, a state-owned infrastructure finance company, has raised $500 million through 5-year green bonds as part of its $10 billion Global Medium-Term Program.
The funds will be used to finance eligible green projects per REC’s Green Finance Framework, the Green Bond principles of the Climate Bonds Initiative, London, and RBI’s ECB Guidelines, with a second-party opinion from Sustainable Fitch.
The five-year note has a semi-annual coupon rate of 4.75% per annum and matures on September 27, 2029. It is the first US dollar bond issuance from an Indian public sector undertaking in 2024.
The final order book was oversubscribed by more than 1.9 times, allowing REC to achieve the tightest spread ever of 127.5 basis points over the US treasury by an Indian non-banking financial institution or a 5-year dollar bond issuance, the company said.
Vivek Kumar Dewangan, CMD, REC Limited, said, “At a time when sustainability and climate action have become global imperatives, REC is honored to contribute to shaping a greener future for the nation and the world. We look forward to continuing our work with global investors, stakeholders, and partners to create lasting value while addressing one of the most critical challenges of our time: climate change.”
The notes will be rated Baa3/BBB—(Moody’s/Fitch) and listed exclusively on the Global Securities Market of the India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar, Gujarat.
The book runners for the issue were Barclays, DBS, HSBC, Mizuho, MUFG, and Standard Chartered Bank.
In April, REC availed a green loan of ¥60.5 billion (~$387.6 million) from SACE, an Italian export credit agency, to finance a slew of green projects in India.
REC recorded a revenue of ₹120 billion (~$1.44 billion) for the third quarter of the financial year 2023-24, a 23.56% year-over-year increase from ₹97.12 billion (~$1.17 billion).