REC raises 61.1 billion yen via medium term notes issue

REC Limited has successfully issued its inaugural 61.1 billion Japanese Yen ($41.56 million) 5-year, 5.25-year and 10-year Green bonds, as part of its $10 billion global medium term notes programme.

REC said it will use the proceeds from the bond issue to finance `Eligible Green Projects’ in accordance with the company’s Green Finance Framework, RBI’s External Commercial Borrowings Guidelines and the approvals granted by it from time to time.

The 5-year, 5.25-year and 10-year Yen bonds will offer yields of 1.76 per cent, 1.79 per cent and 2.20 per cent, respectively

This is REC’s eleventh venture into the international bond market and inaugural Yen Bond issuance, which is also the first Yen Green Bonds issuance by any Indian PSU, says a company release.

It is also the largest ever Euro-Yen issuance in South and South East Asia, the largest non-sovereign Yen-denominated issuance ever from South and South East Asia  and the largest Yen-denominated issuance from India.

The transaction witnessed interest from both Japanese and international accounts, with number of orders from each at 50 per cent, international allocation being one of the highest for any Indian Yen deal.

“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. We are delighted to successfully price our inaugural Euro-Yen Green bonds, which reaffirms REC’s position as an established issuer with deep access to global funding, while maintaining the overall cost of funding lower than the industry standards,” Vivek Kumar Dewangan, chairman and managing director of REC Limited, said.

The notes will be rated Baa3/BBB–/BBB+ (Moody's/Fitch/JCR) and will be listed exclusively on Global Securities Market of India International Exchange (India INX) and NSE IFSC in GIFT City, Gandhinagar, Gujarat. 

DBS Bank, Mizuho, MUFG, and SMBC Nikko are the joint lead managers for the issue.

REC is a 'Maharatna' company under the administrative control of the ministry of power, and is registered with RBI as a non-banking finance company, public financial institution and infrastructure financing company. 

REC provides financing to the entire power-infrastructure sector comprising generation, transmission, distribution, renewable energy and new technologies like electric vehicles, battery storage and pump storage projects, green hydrogen and green ammonia projects. 

REC has also diversified into the non-power infrastructure sector comprising roads and expressways, metro rail, airports, IT communication, social and commercial infrastructure like educational institutions and hospitals, ports and electro-mechanical works of steel mills and refinery. REC also lends to state, central and private companies for creation of infrastructure assets.