IDBI Bank has become the first commercial state-owned bank to raise $350 million via selling green bonds, where proceeds are used for clean energy projects. The company has a pipeline of more than $1 billion clean energy projects requiring credit lines. In futures, IDBI may sell more such bonds depending on those project status. Bonds were priced at 4.26% (fixed rate) after adding a mark-up or spread of 255 basis points on five-year US Treasury, now at 1.71%.
Bond will be of five-year maturity. This is a part of the bank’s medium-term-note programme, set at $5 billion over next few years. The bank has already lent $300 million to such projects and is in talks with several others to lend $2 billion over the next 12-15 months.
Earlier a few months ago, privately-held Yes Bank sold green bonds, but the offer was on euro denominated currency. The bank has appointed about five arrangers to market the bonds. The bonds enjoy the country’s sovereign rating of BBB-, the lowest in investment grade.
IDBI Bank
- IDBI Bank is an Indian government-owned financial service company, formerly known as Industrial Development Bank of India, headquartered in Mumbai, India.
- It was established in 1964 by an Act of Parliament to provide credit and other financial facilities for the development of the fledgling Indian industry.
- The Bank has an aggregate balance sheet size of INR 3.56 trillion as on 31 March 2015.
Did You Know???
A committee formed by RBI under chairmanship of SH Khan recommended the development financial institution (IDBI) to diversify its activity and harmonise the role of development financing and banking activities by getting away from the conventional distinction between commercial banking and developmental banking.
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Who is the present Managing Director & Chief Executive Director of IDBI Bank?
