State-owned non-banking finance firm REC Ltd on Saturday said it has raised USD 750 million (about Rs 6,138 crore) through issuance of green bonds.

REC chairman Vivek Kumar Dewangan said: “We are very delighted with the successful completion of this transaction which reinforces REC’s status as one of the most accomplished and frequent issuers in the international capital markets. This green bond issuance is poised to contribute to India meeting its commitments towards climate action plan and energy transition with a focus on green projects.”

REC Limited, a subsidiary of Power Finance Corporation Limited informed that the company 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, it said in compliance with provisions of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 

These Bonds will mature on April 11, 2028 and all principal and interest payments will be made in U.S. Dollars. The expected settlement date for these Bonds is April 11, 2023.

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 External Commercial Borrowings ( ECB) guidelines, according to a statement.

“REC Ltd has successfully raised USD 750 million through 5-year 144A/ RegS green bonds under its global medium-term programme of USD 7 billion,” 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.

REC share splco

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.