IDBI Bank to issue five-year green bonds today
The proceeds of the green bonds will be used to fund clean energy projects, said IDBI Bank's chief financial officer N.S. Venkatesh
Mumbai: State-owned lender IDBI Bank will issue five-year green bonds to overseas investors, the proceeds of which will be used to fund clean energy projects, said the bank’s chief financial officer N.S. Venkatesh on Monday.
The bank has already lent $300 million to such projects and is in talks with several others to lend $2 billion over the next 12-15 months.
The issue is “benchmark-sized” which enables the issuer to raise at least $350 million, said a bond sale arranger familiar with the issue.
This is the second issue of dollar-denominated green bonds from India, the first being that of EXIM Bank in March. EXIM Bank had raised $500 million by pricing its green bonds at 147.5 basis points over US treasuries.
Emerging market bond yields have moved up since the EXIM Bank issue and IDBI Bank’s green bond issue has an indicative pricing of 270 bps over US treasuries, said two bankers familiar with the issue.
The bank has appointed six arrangers to market the bonds. The bonds enjoy the country’s sovereign rating of BBB- by global rating agency Fitch Ratings.
“Our talks with investors have been very encouraging and investors are very much interested in the issue. We have strong credentials in green project financing and we are also providing investors with a certification by an external agency that would say only green projects would be financed,” said Venkatesh. Climate Bond Initiative, a London based non-profit organization that will certify the bonds.
IDBI Bank was last seen in the dollar bond market in October 2014 when it borrowed $350 million by pricing its bonds at 275 bps above US treasuries. The lender will also raise ₹ 2,800 crore through a qualified institutional placement.
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Business NewsCompaniesIDBI Bank to issue five-year green bonds today
First Published:23 Nov 2015, 02:26 PM IST
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