Mumbai: HDFC Bank has raised $700 million from two tranches of a foreign bond issuance, which includes a $300 million sustainable bond issue. The sustainable bond issuance is part of an overall raise of $750 million through Regulation S Bonds.
Of the $700 million raised, $300 million has a tenure of three years with a spread of 95 basis points over the US Treasury, while the remaining $450 million has a tenure of five years with a spread of 108 basis points over the 5-year US Treasury. These credit spreads mark the tightest achieved by an Indian issuer for a three-year sustainable bond and a five-year senior unsecured bond of similar size in USD Regulation S issuance.
The $300 million sustainable bond, with a coupon rate of 5.196%, is set to mature on February 15, 2027, and holds a BBB- rating from S&P. Similarly, the $450 million bond, featuring a 5.18% coupon rate, is due on February 15, 2029, and also carries a BBB- rating.
The proceeds from the sustainable finance bond will be allocated towards funding green and social loans in accordance with sustainable finance principles. At the same time, the remaining funds will be used to finance general banking activities.
“ The funds raised through the sustainable finance bonds will be prioritized for lending towards electric vehicles, SMEs, and affordable housing. We are strongly committed to building a green and social portfolio while adhering to the bank’s risk philosophy, “ said. Arup Rakshit group head of treasury at HDFC Bank.
The bonds will be listed on the India International Exchange (India INX) in GIFT IFSC. Moody’s has rated the bonds as Baa3 (stable), while S&P has rated them as BBB- (stable). The bank has appointed Barclays, BofA Securities, J.P. Morgan, MUFG, and Standard Chartered Bank as Joint Global Coordinators and Joint Lead Managers.
