This marks the 4th successful USD bond issuance by the Company since the relaxation in the ECB guidelines.
Shriram Transport Finance Company has successfully priced a USD 500 million Fixed Rate Senior Secured 144A / Reg S Bond for a 3.5 year tenor at 5.100%. STFC’s bond transaction also marks the first international public social bond issuance from India.
STFC’s inaugural Social Bond issuance is guided by STFC’s Social Finance Framework which is aligned to the ICMA Social Bond Principles. The proceeds from the bond would be used for employment generation including through MSME financing and microfinance. STFC has obtained a second party opinion from Sustainalytics describing the social bond framework as “credible and impactful” and an Independent Limited Assurance Report from KPMG.
The Company engaged investors in Hong Kong, Singapore, London and US through a series of calls. On the back of strong investor feedback, the transaction was launched with an initial price guidance of 5.375% area. Following a strong book build supported by high quality long only investors, the Company was able to tighten pricing by 27.5bps to 5.100%.
The bond got overwhelming response from investors with the final order book in excess of USD 2.20bn and oversubscription of >4x. The transaction witnessed 50% participation from US, 37% from Asia and 13% from EMEA with 85% investment from asset managers, 5% from banks, 5% from Insurance and 5% from private banks and others. The order book received interest and demand from marquee Social Bond Investors.
Umesh Revankar, Managing Director and CEO of Shriram Transport Finance Company, while describing the successful issuance stated “We are delighted by the continued strong participation by the global investor community.Social Impact continues to remain a focus area for the company and we are pleased to have received significant interest for our inaugural Social Bond. The social impact is similar to our priority sector with some strict exclusion and has big interest from international investor community.”
Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Emirates NBD Capital, HSBC, ING, J.P. Morgan and Standard Chartered Bank acted as Joint Bookrunners and Joint Lead Managers.