ADB Raises INR 1.25 Billion in Green Masala Bonds
The bond, the largest by ADB, structured as a 4-year currency-linked instrument, features a one-time repayment at maturity and carries a fixed interest rate of 6.72% annually
The Asian Development Bank announced the successful issuance of its largest Indian currency green bond, raising Rs 1,250 crore (approximately USD 150 million). The bond, structured as a 4-year currency-linked instrument, features a one-time repayment at maturity and carries a fixed interest rate of 6.72% annually, according to the ADB’s official statement.
Popularly known as masala bonds, they are denominated in Indian rupees but settled in United States dollars, with returns tied to the performance of the Indian currency. The funds raised through this green bond will be allocated to finance ADB’s private sector renewable energy and green finance projects, aligning with the organization’s priorities in addressing climate change, building resilience to climate and disasters, and enhancing environmental sustainability.
ADB Treasurer Pierre Van Peteghem emphasized the significance of sustainability in international capital markets, highlighting ADB’s longstanding presence as a regular issuer of green bonds. The ability to fund climate change projects through local currency green bonds represents a pinnacle achievement, contributing to the development of capital markets, he said.
The bond, listed on the Luxembourg Stock Exchange, was arranged by Standard Chartered Bank and subscribed by a group of investors from the UK and US. Investors were attracted to the benchmark size of the local currency bond with a green theme, backed by a multilateral development bank.
ADB, having been an active participant in the Indian rupee bond market since 2004, marked its return after a 3-year gap with this offering. The bank has consistently raised funds through masala bond issues since 2014, exceeding USD 1 billion equivalent. ADB’s commitment to fostering a prosperous, inclusive, resilient, and sustainable Asia and the Pacific remains steadfast as it strives to eradicate extreme poverty. Established in 1966, ADB is owned by 68 members, with 49 from the region.
Also Read
State Owned REC Raises Rs 3,500 Crore through Yen-Denominated Green Bonds