Axis Bank is likely to price its debut green bond close to 160 basis points above the five-year US Treasury yield, according to sources aware of the development.
“The book building is going on. The final price guidance has come in at 160 basis points over the five-year US Treasury yield. The issue size should be close to $500 million,” said a banker close to deal.
The bonds will be dollar-denominated and will have a tenure of five years. Moody’s Investors Service has assigned a “Baa3” rating to the bank’s proposed senior unsecured notes, issued under its $5 billion global medium-term note (GMTN) programme.
The 144A/Regulation S issue saw an initial price target at 175 basis points over the five-year US Treasury yield according to bankers close to the deal.
JP Morgan, HSBC, Standard Chartered, Citi, Bank of America, Axis Bank Singapore Branch and Credit Agricole are the bankers to the deal, according to bond arrangers.
The drawdown will be carried out from the bank’s Dubai International Financial Centre (DIFC) branch, and net proceeds will be allocated for financing of eligible green projects.
“The bonds will have a maturity of 5 years and will be listed on the Singapore Stock Exchange and the London Stock Exchange,” Moody’s said in a release.
This year has seen lower volumes in terms of offshore bond issuances from India. Some of the major issuances include those by Exim Bank, NTPC and ICICI Bank— having raised a total of $1.7 billion.
It is noteworthy that 2014 was a record year in terms of offshore bond issuance volumes from India the value of which stood at $18.6 billion. Bankers were confident that the trend would continue in 2015. However, the issuance volume fell to less than half of what was seen in 2014.