The bonds represent direct, unconditional and unsecured obligations of the issuer, a statement said
The net proceeds from the sale of the Notes will be used for lending to the power sector
New Delhi: In the first-ever overseas bond issue by an Indian company since the COVID-19 crisis, state-run REC (Rural Electrification Corporation) has raised USD 500 million (around Rs 3,773 crore) through the issuance of overseas bonds, the company said on Wednesday. “REC has issued US $500,000,000, 4.75 percent Notes due 2023, on May 12, 2020,” an REC statement said. It added that the Notes will mature on May 19, 2023 and all principal and interest payments will be made in US Dollars.
“In the lead up to the issuance, REC was actively monitoring markets, waiting patiently for an opportune window. With the global lockdown fears receding somewhat and liquidity coming back to the Asian markets, on 12th May, 2020, REC pulled the trigger and tapped the offshore debt markets,” the statement said.
Settlement date for Notes is May 19
The settlement date for the Notes is expected to be May 19. The bonds represent direct, unconditional and unsecured obligations of the issuer, the statement said. “With this benchmark issuance, REC has effectively opened up the offshore debt market for other Indian credits to tap into. The strong reception to this deal demonstrates both the resilience of the Indian economy among international investors and the high regard for REC’s credit quality,” said Ajeet Kumar Agarwal, Chairman and Managing Director of REC.
Proceeds will be used for lending to power sector
“The paper was strongly received by investors, with books rapidly crossing USD 2 bn across Asia and Europe. US investors too came in strongly, with REC finally receiving subscription of more than 5 times of the actual issue size, through 175 investors. The strong investor demand saw the issuance being upsized from the base size of 300m to 500m. The 3 year issuance was priced at a coupon of 4.75 percent,” said the statement.
The net proceeds from the sale of the Notes will be used for lending to the power sector, REC said.
REC Limited has successfully raised USD 500 million through issuance of overseas bonds. This is the first ever overseas bond issue by an Indian company since the COVID-19 crisis. #pressrelease #markets #powersector #fundraising #COVIDー19 #Covid_19india pic.twitter.com/ACDg77AG35
— REC Limited (@RECLindia) May 13, 2020