India's HDFC Bank raises $300 million via maiden sustainable finance bond issue

MUMBAI (Reuters) -India's HDFC Bank has raised $300 million through its debut sustainable finance dollar-denominated bond issue, the lender said in a release on Wednesday.

The country's biggest private lender by market capitalisation priced its three-year sustainability bond at a yield of 5.196%. This is 95 basis points (bps) over the three-year U.S. Treasury yield, sharply lower than the initial guidance of a 125-bps spread.

"The funds raised through the sustainable finance bonds will be prioritised for lending towards electric vehicles, small and medium enterprises and affordable housing,” said Arup Rakshit, group head-treasury at HDFC Bank.

The bank has also raised another $450 million via senior unsecured five-year dollar bonds, at a coupon of 5.180%. These notes were priced 108 bps over the five-year U.S. yield, also lower than the initial guidance of 140 bps.

The proceeds from the five-year notes will be used for funding and expansion of the bank's foreign branches and foreign subsidiaries as well as for general corporate purposes, the lender said.

The Regulation-S dollar notes will be rated Baa3 by Moody's and BBB– by S&P Ratings.

The notes will be issued by the bank's Gujarat International Finance Tech City branch and will be listed on the India International Exchange.

Barclays, Bank of America, JP Morgan, MUFG and Standard Chartered are the joint global coordinators and lead managers.

(Reporting by Bhakti Tambe; Editing by Sonia Cheema and Janane Venkatraman)