$300 million in its maiden sustainable finance bond issue.
In a significant move towards sustainable finance, HDFC Bank, the largest private sector lender, announced the successful raising of $300 million in its maiden sustainable finance bond issue. This issuance is part of the $750 million bond raise announced on Tuesday and is poised to drive impactful environmental and social responsibility initiatives.
The $300 million sustainable finance bonds, raised for a tenure of three years, represent a notable milestone for HDFC Bank. The remaining $450 million will be repaid over five years, showcasing the bank’s commitment to long-term sustainability. Notably, these bonds will be listed on the GIFT City, adding further transparency and credibility to the issuance.
With spreads of 0.95% over the US treasury for the three-year tenure and 1.08% over the US Treasury for the five-year term, HDFC Bank has achieved the tightest spreads by an Indian issuer. This feat underscores the bank’s robust financial standing and investor confidence in its sustainable finance initiatives.
Prioritizing Green and Social Loans
The proceeds from the sustainable finance bonds will be allocated towards funding green and social loans, aligning with the bank’s commitment to sustainable finance principles. Notably, some funds will be directed towards financing electric vehicles, small businesses, and affordable housing, reflecting HDFC Bank’s dedication to fostering positive social and environmental impact.
Arup Rakshit, HDFC group head for treasury, emphasized the company’s strong commitment to building a green and social portfolio while adhering to its risk philosophy. By prioritizing sustainability in its financing activities, HDFC Bank drives positive change and contributes to a greener, more inclusive future.
The sustainable finance bonds issued by HDFC Bank received favorable ratings, with Moody’s rating them as Baa3 (stable) and S&P ranking them as BBB- (sound). These endorsements underscore the bank’s credibility and commitment to sustainable finance practices.
As HDFC Bank continues to lead by example in sustainable finance, it reaffirms its position as a key player in driving positive environmental and social impact through responsible banking practices.
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