IDBI Bank on Thursday said it has mopped up $350 million via a five-year Reg S Green Bond issue at a fixed coupon of 4.25 per cent.

The issue was oversubscribed by three times. It was made under the $5 billion MTN (medium term note) programme listed on the Singapore Stock Exchange.

The public sector bank, in a statement, said the transaction was launched on November 23 with an initial guidance of five-year Treasury + 270 basis points (bps). During the course of the day, the book rapidly built up and the spread tightened by 15 basis points, with the final price guidance set at five-year Treasury + 255 bps area.

The transaction attracted interest from a diversified range of investors, including asset managers (50%), banks (28%), private banks (17%), and corporate and others (5%). Around 82% of the allocation was made to Asian Investors, 18% to European investors.

Kishor Piraji Kharat, Managing Director & Chief Executive Officer, said that IDBI Bank has become the first state-owned commercial bank to raise $350 million by selling green bonds.

The issue proceeds will be used for refinancing of clean energy projects in India assisted by IDBI Bank which include wind energy, solar energy, biomass, water recycling systems, energy distribution and management system. They will also be used for financing of new projects in the above mentioned areas, including sustainable transport.

The bank said it has already deployed $300 mn towards clean energy projects and expects to deploy an additional $2 billion in the next 12-15 months.

The end use of the proceeds of the green bonds would be certified by third party to ensure clear transparency and provide comfort to investors.

Further, IDBI Bank has also decided to become a member of Climate Bonds Initiative, United Kingdom. Climate Bonds is an international organisation in the world focusing on mobilising huge funds for climate change solutions.

Related Topics