Sri Lanka to get EXIM bank India’s US$500mn green bond support for green projects

Apr 01, 2015 (LBO) – The Export-Import Bank of India, India’s export finance institution, is planning to support Sri Lanka through its recently launched 5 year “Green Bond” issue of 500 million US dollars, the bank said in a statement.

The issue attracted subscription of around 3.2 times which was led by strong demand, across 140 accounts.
“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,” the bank said in its statement.

“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 green bond issue was priced at 147.50 basis points over US Treasuries (UST) at a fixed coupon of 2.75 per cent 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.

The issue attracted over 1.6 billion US dollars of book across 140 accounts with significant participation from green investors and real money accounts, the bank said.

“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,” Yaduvendra Mathur, Chairman and Managing Director of Exim Bank said in the statement.

“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.”