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London Stock Exchange (LSE) announced that it welcomes Indian Railway Finance Corporation’s (IRFC) first green bond. The ten year dated green bond raised $500 million with an annual yield of 3.835 per cent and listed on London Stock Exchange’s new International Securities Market. The bond was more than three times oversubscribed and received strong international investor support.
IRFC will use the proceeds of the bond to finance or refinance infrastructure for dedicated freight railway lines and public passenger transport. The bond demonstrates Indian Prime Minister, Narendra Modi’s 2015 commitment to funding India’s infrastructure and growth through the issuance of over £1 billion worth of Masala bonds.
The green bond is certified by Climate Bonds Initiative, an international, investor-focused not-for-profit, which helps build robust and transparent assurance frameworks around green bond investment.
Mr. Shri S.K.Pattanayak, Managing Director, IRFC and Mr. Shri Niraj Kumar, Director of Finance, IRFC, together with Mr. Dinesh K. Patnaik, Deputy Indian HC to the UK joined Nikhil Rathi, CEO of London Stock Exchange plc, to celebrate the green bond listing this morning.
This is the sixth green bond transaction on London Stock Exchange by an Indian issuer and fourth on London Stock Exchange’s new International Securities Market (ISM), reinforcing London Stock Exchange’s position as a leading global venue for international debt and sustainable fundraising. Green bonds in London have raised over $3.2 billion in November 2017 alone.
To date in 2017, there has been 64% growth in the number of green bonds listed on London Stock Exchange, compared with 2016 and a 65% increase in money raised. In 2017 year-to-date 23 green bonds have listed in London, raising $9.4 billion, compared to 14 green bonds which raised $5.7 billion in 2016. In total, there are 61 green bonds listed in London that have raised over $20 billion in aggregate terms across seven currencies.
Nikhil Rathi, CEO, London Stock Exchange plc, said:
I am honoured to celebrate this landmark transaction with the Managing Director and Director of Finance of IRFC. Today’s green bond listing is a significant milestone for India and IRFC, allowing the country to further tap a dynamic new international channel of finance for Indian infrastructure. In particular we are honoured to support the financing of the Indian Railways, the heartbeat of the Indian economy.
Today also re-enforces the progress being made in the Energy for Growth partnership established in April between the UK and India, strengthening London’s position as India’s closest and most valued funding partner.
There is an undeniable shift in momentum in the green and sustainable financing across the globe. London Stock Exchange Group is at the forefront of this green financing movement, developing innovative products and services in partnership with our customers.
Mr. S. K. Pattanayak, Managing Director, Indian Railway Finance Corporation (IRFC) commented:
IRFC is delighted to launch its first green bond on London Stock Exchange today. Our debut green bond is a significant milestone for IRFC, supporting the company’s ambitious infrastructure green projects, which includes procurement of rolling stocks electrifying rail tracks across India.
Not only was the bond three times oversubscribed but today we have also achieved our aim, through London, to increase our investor base across EMEA.
Sean Kidney CEO Climate Bonds Initiative added:
Indian Railways is the third state backed entity to seek global exposure by issuing a certified green bond and listing in London. This IRFC green bond and the previous issuance from IREDA and PFC are a sign of the enormous market opportunities for international investors in green energy, transport and infrastructure to meet India’s intertwined climate, energy and development goals.