Hero Future Energies First USD Green Bond Fetches $3 Billion Orders

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USD Green bond offering by Hero Future Energies, renewable energy venture of the Hero group was successfully oversubscribed by 8.5 time

Total order book size for the offering was over USD 3 billion. Green bonds were finally priced at a coupon rate of 4.25% for a 6-year issuance. This offering found favourable demand across the globe from marquee investors resulting in 98% allocation to high-quality fund managers and insurance companies

Hero Future Energies renewable energy venture of the Hero group announced issuance of their first USD bond in global markets, through Clean Renewable Power (Mauritius), a wholly owned subsidiary of Hero Future Energies Asia. HFE’s green bond received orders of over USD 3 billion and was successfully priced at a coupon rate of 4.25% for a six-year maturity period. The issuance was oversubscribed more than 8.5 times.

Rahul Munjal, Chairman & Managing Director, Hero Future Energies said, “HFE’s first USD bond offering has created a landmark by achieving the highest levels of oversubscription for any transaction out of India this year in the USD bond market. This is a very encouraging move by global investors especially in the post pandemic phase and demonstrates the importance of ESG among the investor community. This bond offering has opened up the global debt capital markets for HFE, thereby diversifying the company’s existing sources of capital and positions HFE as a robust player in the global cleantech space.”

Ben Fraser, Chief Financial Officer, Hero Future Energies also commented on this outcome, “The market response to HFE’s first USD bond is a testament to the company’s excellent credit story. Our debut green bond offering witnessed participation from an exceptional list of key global blue-chip investors. The bond was launched to the market at an initial price guidance of 4.75%. Given the strong demand from global accounts, price guidance was tightened by 50 bps. Even with the largest tightening from any Indian credit this year, most investors continued to remain in our books, resulting in a final orderbook of over USD 3 bn, with allocation of 58% to Asian investors, 15% to EMEA and 27% to investors in the US.”

HFE’s first USD green bond comes after the company’s success in 2016 with issuance of first ever climate bond by any Indian renewable company.

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