REC Ltd. Raises $1.15 Billion from Six Banks, Aims to Allocate it for Power and Infrastructural Development
The state-owned REC announced on Sept 6 that it raised USD 1.15 billion in two tranches from a consortium of six banks in August. The loan proceeds will be used to fund power, infrastructure, and logistics sector projects as permitted by the Reserve Bank of India's ECB guidelines. The funds were raised through REC's Rs 1.20 lakh crore Market Borrowing Programme for 2023-24.
"Tranche 1 of USD 505 million was raised from Bank of Baroda, Gujarat International Fin Tec-City (GIFT City) IFSC Banking Unit (IBU); Axis Bank, GIFT City IBU and State Bank of India, London Branch on August 3, 2023, while Tranche 2 of USD 645 million was raised from State Bank of India, London Branch; Bank of India, GIFT City IBU; Bank of India, London Branch and HSBC, GIFT City IBU on August 31, 2023," an REC statement said.
Both tranches received a total commitment of USD 550 million from GIFT City IBUs.
This is the highest single-month commitment to REC from GIFT City IBUs, surpassing the previous highest commitment of USD 345 million in December 2021.
The loans have a 5-year term and are benchmarked to the overnight SOFR (Secured Overnight Financing Rate), which is the benchmark rate for USD loans.
"The successful completion of these two transactions in a single month demonstrates REC's strong financials and continues to be appealing to international lenders," said Vivek Kumar Dewangan, Chairman and Managing Director of REC.