REC Raises $750 Mn Via Green Bonds

The net proceeds from the issue of the bonds will be applied to finance, in whole or in part, the eligible green projects in accordance with the approvals granted by Reserve Bank of India from time to time and in accordance with the ECB guidelines, said REC in its regulatory filing.

"This is to inform that REC Limited under its USD 7 billion Global Medium Term Note Programme, has priced and issued US$ 750,000,000, 5.625% Green Bonds on April 3, 2023.," the statement said.

As a frequent issuer in the market and given the relatively stable market backdrop last week, the REC decided to capitalise on the environment to carry out an intra-day execution post extensive investor roadshows spanning two weeks in different geographies covering Singapore, the UK, and the US, it stated.

The issue marks the REC's return to the capital market since 2021, with the last 144A transaction in 2020, this being REC's 10th venture into the international bond market.

It is the largest-ever senior USD tranche by an Indian NBFC (non-banking finance company). It is also the largest-ever senior green bond tranche by a South & South-East Asian issuer.

In this issue, the pricing risk of benchmark yield mitigated by the company with the first-ever USD treasury lock transaction.

There was over-subscription of approximately 3.5 times from 161 investors with an active participation from quality accounts.

It stated that investors from across the globe participated in the issue with Asia Pacific (APAC) at 42 per cent, Europe, Middle East & Africa (EMEA) at 26 per cent, and the US at 32 per cent.

The green bond has tenure of 5 years with a maturity date of April 11, 2028.

Barclays, DBS Bank, MUFG, Standard Chartered Bank and State Bank of India, London Branch were the joint book-runners for the issue.