Axis Bank hits world debt market with $500 mn green bonds

Country’s third-largest private sector lender Axis Bank has hit the international debt markets with its maiden green bond issue to raise $500 million, market sources said on Monday. The unsecured senior bonds issue is rated by all the three international ratings agencies. Axis Bank is the fifth domestic institution to sell green bonds, with the first being Yes Bank in February last year, that garnered Rs 1,000 crore through rupee-denominated green bonds, followed by IDBI Bank and Exim Bank. Axis Bank has roped in six investment bankers for the deal - Bank of America-Merrill Lynch, Citi, Credit Agricole, HSBC, JP Morgan and StanC. However, none of the bankers was available for comments and so was Axis Bank spokesperson. 

Green bonds are like any other debt instrument, but the funds raised are used exclusively for renewable energy projects. Global green bonds markets are worth around $23 billion now, while the domestic market is over Rs 8,700 crore. Sources said Axis Bank’s issue which is already in the markets and is likely to be closed later in the day, will raise at least $500 million from the international market, making it the first such issue for the lender. 

“The lender has given an initial pricing guidance of 170 basis points over the US Treasury,” said a source.