India’s HDFC Bank, the country’s largest private lender by market capitalization, has successfully raised $750 million through its debut sustainable finance dollar-denominated bond issue and senior unsecured dollar bonds, as stated in a release on Wednesday.
The bank priced its three-year sustainability bond at a yield of 5.196%, 95 basis points (bps) over the three-year U.S. Treasury yield. This pricing, significantly lower than the initial guidance of a 125-bps spread, demonstrates robust investor interest in sustainable finance initiatives.
Arup Rakshit, group head-treasury at HDFC Bank, highlighted that the funds raised through the sustainable finance bonds would be directed towards lending for electric vehicles, small and medium enterprises (SMEs), and affordable housing, aligning with the bank’s commitment to sustainable development.
In addition to the sustainable finance bond, HDFC Bank raised another $450 million via senior unsecured five-year dollar bonds at a coupon of 5.180%. These notes were priced at 108 bps over the five-year U.S. yield, which was also lower than the initial guidance of 140 bps.
The proceeds from the five-year notes will be allocated towards funding and expanding the bank’s foreign branches and subsidiaries, along with general corporate purposes.
The Regulation-S dollar notes, to be issued by the bank’s Gujarat International Finance Tech City branch, will carry credit ratings of Baa3 by Moody’s and BBB– by S&P Ratings. These notes will be listed on the India International Exchange.
Barclays, Bank of America, JP Morgan, MUFG, and Standard Chartered served as joint global coordinators and lead managers for the bond issuance, underscoring the bank’s strong global investor base and market confidence in its financial offerings.