State-owned REC Friday said it has raised USD 650 million (Rs 4,450 crore) by issuing five-year REG S bonds in the international market under its global medium term programme of USD 5 billion.
The proceeds will be used to finance power projects in accordance with the approvals granted by the RBI from time to time and in accordance with the ECB (external commercial borrowing) Guidelines, REC said in a statement.
According to the statement, the five-year REG S Bond has a semi-annual coupon rate of 3.375 per cent per annum and a maturity date of July 25, 2024.
The transaction saw an oversubscription of more than four times with active participation from more than 140 major international investor accounts, allowing it to price inside its current market levels with the tightest coupon ever on its five-year bond.
The Initial Price Guidance was 195 basis points over the five-year US Treasury.
The company decided to upsize the deal to USD 650 million from the earlier benchmark target to accommodate keen investor interest in the issuance from REC.
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The final order book has been over USD 2.70 billion from over 140 accounts across the globe with Asia accounting for 63 per cent followed by EMEA countries (Europe, the Middle East and Africa) 37 per cent.
REC's bonds opened for subscription on Thursday across global centres. The transaction evidences strong demand and confidence from investors around the globe towards REC Ltd's differentiated credit despite the weaker emerging market headlines and some concerns on Indian NBFI sector, the firm said.
This demonstrates a very strong investor appetite for India sovereign-linked paper, at a very tight pricing. Barclays, DBS Bank Ltd, HSBC, MUFG and Standard Chartered Bank are the joint bookrunners for the issue, it added.