HDFC Bank announces raising $750 mn through multi-year overseas bonds

Private lender mops up $300 mn via maiden sustainable finance bond

HDFC Bank has raised $750 million through overseas offerings, including $300 million mobilised through a maiden sustainable finance bond.

The $300 million bond has a tenure of three years with 95 basis points spread over US Treasury. Another $ 450 million has been raised for a tenure of five years, with a spread of 108 basis points over US Treasury, HDFC Bank said in a statement.

These are the tightest credit spreads achieved by an Indian issuer for a three-year sustainable bond and five-year senior unsecured bond for a similar size of USD Reg S issuance, said HDFC Bank, the country’s largest private lender.

State Bank of India (SBI), which is owned by the government, early January raised $600 million from a clutch of international investors by issuing a five-year paper as part of its $10 billion medium-term note programme. In December 2023, SBI had placed $250 million senior unsecured green floating rate notes maturing on December 29, 2028.

HDFC Bank said it will first use the proceeds for funding green and social loans and the rest to finance general banking activities. ''The funds raised through the sustainable finance bonds will be prioritised for lending towards electric vehicles, SMEs and affordable housing,” said Arup Rakshit, group head-treasury, HDFC Bank, referring to small and medium enterprises.

The bonds will be listed on India International Exchange (India INX) in GIFT IFSC. The paper was rated Baa3 (stable) by Moody’s and BBB- (stable) by S&P.

The bank had mandated Barclays, BofA Securities, J.P. Morgan, MUFG and Standard Chartered Bank as joint global coordinators and joint lead managers for the bond issue.