Exim Bank of India raises US$ 500 Million 5 year Tenor Reg S Green Bond at a coupon of 2.75% p.a.

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Export-Import Bank of India, India’s premier export finance institution, successfully launched a 5 year Reg S Green Bond issue of US$ 500 mn on March 24, 2015. The issue attracted subscription of around 3.2 times the issue size led by strong demand, across 140 accounts

The 5 year US$ 500 mn Eurodollar Green bond issue was priced at 147.50 basis points over US Treasuries (UST) at a fixed coupon of 2.75% p.a., cutting through the current secondary trading levels of similar bonds and achieving a pricing tighter than the Bank’s own US$ 500 mn Reg S bonds issued in February 2015 for a 5.5 year tenor.

The above transaction is significant as it marks the first USD-denominated Green bond offering out of India as well as the first benchmark-sized Green bond out of Asia in 2015 and the third ever Green bond issuance out of Asia. It provides Exim Bank an opportunity to expand its investor base and to support an important market as investors seek more socially responsible investment options. Exim will use the net proceeds from the sale of the notes to fund Eligible Green Projects in countries including Bangladesh and Sri Lanka.

The issue attracted over US$ 1.6 bn of book across 140 accounts with significant participation from green investors and real money accounts. The offering saw majority (58%) participation from fund managers, while banks (20%), sovereign wealth funds / insurance companies (18%) were the other major investor classes. The issue was distributed 60% to Asian investors, 30% to EMEA (Europe, Middle East and Africa) and balance to offshore US investors. Bank of America Merrill Lynch and J.P. Morgan acted as Joint Lead Managers on the offering. Exim Bank of India has been rated as ‘BBB-’ by Standard and Poor’s and ‘Baa3’ by Moody’s, same as the rating of Government of India.

Mr.Yaduvendra Mathur, Chairman and Managing Director of Exim Bank, commented, “The Green Bonds reinforce our commitment to the environment and helped us connect with socially responsible investors that care about the Green investments that we facilitate. Exim Bank has been a pioneer in opening new markets for capital raising for other Indian issuers. In the past, Exim India was the first to issue bonds in the Uridashi, Australian Dollar, Singapore Dollar and Samurai bond markets, which was followed by other Indian issuers. This is another attempt to open an increasing important market segment to other Indian issuers and we see more Indian companies following suit to tap the Green bond markets”.

Mr. David Rasquinha, Deputy Managing Director of Exim Bank, commented, “We are pleased to see the robust demand for our transaction despite recent market volatility. We were able to upsize the transaction to US$500mm from initial indication of US$250-300mm based on strong investor response. The deal announcement followed calls with select global investors spanning over two days. We were able to pick the optimal execution window and are very satisfied with the outcome. Exim Bank has successfully expanded its investor base to include a new class of socially responsible investors”.
Exim Bank aims to promote India’s international trade and investment. The Bank offers Indian companies a comprehensive range of products and services, supported by analysis and research, with a view to enhancing their international competitiveness. The Bank supports Indian exporting companies, especially medium-sized enterprises, in their globalisation efforts through a variety of lending programmes.

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