State Owned REC Raises Rs 3,500 Crore through Yen-Denominated Green Bonds

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REC’s bond issue is the largest ever Euro-Yen issuance in South and South East Asia, largest Yen-denominated issuance from India, and largest non-sovereign Yen-denominated issuance ever from South and South East Asia

India Government-owned company, REC Ltd, successfully raised ¥61.1 billion, equivalent to around Rs 3,500 crore through the issuance of green bonds denominated in Japanese Yen (JPY). This marks REC’s 11th venture into the international bond market and its inaugural Yen Bond issuance, making it the first Indian PSU to issue Yen Green Bonds.

The green bonds include offerings with maturities of 5 years, 5.25 years, and 10 years, all part of REC’s $10 billion Global Medium Term Notes Programme. The total amount raised represents the largest-ever Euro-Yen issuance in South and South East Asia, the largest Yen-denominated issuance from India, and the largest non-sovereign Yen-denominated issuance in South and South East Asia.

Proceeds from the bond issuance will be dedicated to financing Eligible Green Projects, adhering to REC’s Green Finance Framework, RBI’s External Commercial Borrowings Guidelines, and relevant approvals.

“As a frequent issuer in the international debt capital markets, we are always on the lookout to tap new markets and further diversify our funding sources,” Vivek Kumar Dewangan, Chairman & Managing Director of REC, said.

The bond transaction attracted interest from both Japanese and international investors, with orders evenly split between the two, reflecting a high international allocation compared to other Indian Yen deals.

The green bonds, rated Baa3/BBB–/BBB+ by Moody’s, Fitch, and JCR, respectively, will be exclusively listed on the Global Securities Market of India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar. DBS Bank, Mizuho, MUFG, and SMBC Nikko served as joint lead managers for the issue.

REC Ltd: Powering India’s Growth

As a ‘Maharatna’ company operating under the Ministry of Power, Government of India, REC Ltd stands as a pivotal financial institution registered with the RBI as a Non-Banking Finance Company (NBFC), Public Financial Institution (PFI), and Infrastructure Financing Company (IFC), REC plays a crucial role in meeting India’s diverse energy and infrastructure needs.

REC has broadened its financing mandate, now comprising the entire Power-Infrastructure sector. This includes support for Generation, Transmission, Distribution, Renewable Energy, and cutting-edge technologies such as Electric Vehicles, Battery Storage, and Green Hydrogen. Recently, REC has expanded into the Non-Power Infrastructure sector, covering Roads & Expressways, Metro Rail, Airports, IT Communication, Social and Commercial Infrastructure (Educational Institutions, Hospitals), Ports, and Electro-Mechanical (E&M) works across various sectors like Steel and Refinery. REC provides long-term loans and diverse financing products to State, Central, and Private Companies.

 

Source: https://www.esgtimes.in/fin-tech/finance/state-owned-rec-raises-rs-3500-crore-through-yen-denominated-green-bonds/

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