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PFC issues India’s first-ever ‘Euro Green Bonds’

In what is a milestone issuance for Power Finance Corporation Ltd (PFC), the govt owned power financer has successfully issued its maiden Euro 300 million 7 year Euro Green Bond issuance
PFC issues India’s first-ever ‘Euro Green Bonds’
PFC issues India’s first-ever ‘Euro Green Bonds’

New Delhi: Power Finance Corporation Ltd (PFC) has successfully issued its maiden Euro 300 million 7 year Euro Green Bond issuance on September 13. The pricing of 1.841 percent achieved is the lowest yield locked in by an Indian issuer in the Euro markets.

This is a milestone issuance for PFC and marks many first’s for PFC. It is not only the first Euro bond issuance by PFC but also the first-ever Euro denominated Green bond issuance from India. Moreover, it is the first-ever Euro issuance by an Indian NBFC and the first Euro bond issuance from India since 2017.

The issuance saw strong participation from institutional investors across Asia and Europe with participation from across 82 accounts and was oversubscribed 2.65 times.

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Commenting on the success of bond issuance, PFC's Chairman & Managing Director (CMD) RS Dhillon stated that the overwhelming response to the issuance reflects international investor’s confidence in PFC. This issuance also demonstrates our commitment to achieving India’s renewable energy goals. Further, this bond issuance would help PFC in diversifying its currency book as well as the investor base.

While PFC's Director (Finance) commented that I am proud to see that PFC has successfully forayed into the European market for its international raising and has concluded the inaugural Euro Bond issuance at attractive terms and pricing.

What is Euro Green Bond?

A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects. These bonds are typically asset-linked and backed by the issuing entity's balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations.

Dating back to the first decade of the 21st century, green bonds are sometimes referred to as climate bonds, but the two terms are not always synonymous.

Now, what is Euro Green Bond? Since these particular bonds are regulated by European Union Commission, they are referred to as Euro Green Bonds.

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