HDFC Bank, India's largest private lender in terms of market capitalization, has successfully secured $300 million through its inaugural sustainable finance bond denominated in dollars. The bank priced the three-year sustainability bond with a yield of 5.196%, representing a spread of 95 basis points (bps) over the three-year U.S. Treasury yield. Notably, this spread is considerably narrower than the initially indicated 125-bps margin.
Arup Rakshit, the group head of treasury at HDFC Bank, stated that the proceeds from the sustainable finance bonds would be prioritized for lending in areas such as electric vehicles, small and medium enterprises, and affordable housing. Additionally, the bank successfully raised $450 million through senior unsecured five-year dollar bonds featuring a coupon of 5.180%. These bonds were priced at a spread of 108 basis points (bps) over the five-year U.S. yield, demonstrating a reduction from the initial guidance of 140 bps.
HDFC Bank plans to utilize the funds generated from the five-year notes for the financing and expansion of its foreign branches and subsidiaries, as well as for general corporate purposes. The Regulation-S dollar notes are set to receive a Baa3 rating from Moody's and a BBB- rating from S&P Ratings. These notes will be issued through the bank's Gujarat International Finance Tech City branch and listed on the India International Exchange. The joint global coordinators and lead managers for this issuance include Barclays, Bank of America, JP Morgan, MUFG, and Standard Chartered.