Hero Future Energies' first green bond issuance in overseas market fetches orders worth $3 billion
The firm received the orders though its subsidiary Clean Renewable Power (Mauritius) and had priced the first green bond issuance at a coupon rate of 4.25 percent for a six-year maturity period.
March 19, 2021 / 05:45 PM IST
HFE's wind-solar hybrid project in Karnataka's Raichir district is India’s first large-scale commercial. | Representative image. (PC-HFE)
Hero group's Hero Future Energies (HFE) on March 19 said that it received orders worth $3 billion in its first green bond issuance in the overseas markets.
The firm received the orders through its subsidiary Clean Renewable Power (Mauritius) and had priced the first green bond issuance at a coupon rate of 4.25 percent for a six-year maturity period. The bond issuance was oversubscribed over 8.5 times, reported the Business Standard quoting HFE.
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"The bond was launched to the market at an initial price guidance of 4.75 percent. Given the strong demand from global accounts, price guidance was tightened by 50 bps. Even with the largest tightening from any Indian credit this year, most investors continued to remain in our books, resulting in a final order book of over $3 billion," the business daily quoted HFE Chief Financial Officer Ben Fraser as saying.
The firm is aiming to use its Mauritius-based SPV to not only issue USD senior notes, but also use the proposed notes to subscribe to Indian rupee-denominated external commercial borrowing (INR ECB) bonds.
Fraser said that out of the total allocation, 58 percent will go to Asian investors, 15 percent to Europe, the Middle East and African investors and 27 percent to investors in the US. The latest USD green bond by HFE comes years after its first climate bond by any Indian renewable company in 2016.
"We have created a landmark by achieving the highest levels of oversubscription for any transaction out of India this year in the USD bond market. This is a very encouraging move by global investors especially in the post-pandemic phase and demonstrates the importance of ESG among the investor community. This bond offering has opened up the global debt capital markets for HFE," the report quoted HFE chairman Rahul Munjal as saying on bond issuance.
HFE is also getting ready to issue fresh equity of about $250 million to fund its renewable energy projects in the overseas market. HFE is also aiming to become a $1 billion company and is in talks with leading global institutional financers to raise capital.
The firm raised $65 million from the Asian Infrastructure Investment Bank in December 2019. It also received an investment of $150 million from Abu Dhabi Future Energy Company (Masdar) that year.