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State-run REC on Wednesday said that it has successfully raised $1.15 billion in August 2023 in two tranches from a consortium of six banks as the Mandated Lead Arrangers and Bookrunners (MLABs).
The Tranche 1 of $505 million was raised from Bank of Baroda, Gujarat International Fin Tec-City (GIFT City) IFSC Banking Unit (IBU); Axis Bank, GIFT City IBU and State Bank of India, London Branch on August 3, 2023, the power sector lender said.
While under Tranche 2, REC raised $645 million from State Bank of India, London Branch; Bank of India, GIFT City IBU; Bank of India, London Branch and HSBC, GIFT City IBU on August 31, 2023, it added.
Also Read | REC Q1 FY24 net profit up 21% y-o-y to ₹2,961 cr
“Both the tranches taken together saw an aggregate commitment of $550 Million from GIFT City IFSC Banking Units (IBUs). This is the highest ever commitment to REC from GIFT City IBUs in a single month, surpassing the earlier largest commitment of $345 Million in December 2021,” the Maharatna company said.
The loans have been tied up for a 5-year tenor and are benchmarked to Overnight SOFR (Secured Overnight Financing Rate), which is the benchmark rate for the loans denominated in USD.
The proceeds from this facility shall be utilised to fund power, infrastructure and logistics sector projects as permitted under the ECB guidelines of the Reserve Bank of India.
REC CMD Vivek Kumar Dewangan said “REC has been actively looking for various innovative options to diversify its sources of borrowings to lower its cost of borrowings. The successful closure of these two transactions within a single month is a testimony to the strong financials of REC and continues to remain attractive to the International lenders. We are pleased with the overwhelming response of Banks to these loans, which is also our largest single-month fund raising from GIFT City IBUs. This also reinforces REC’s positioning as the largest PSU borrower from the international markets during the current year.”
Also Read | REC inks MoU with Avaada Group; to invest ₹20,000 crore over five years
In a separate statement, REC said it has signed a Foreign Currency Term Loan Agreement for $100 million with Export Import Bank of India (Exim Bank). This is the first term loan being extended by Exim Bank to REC.
The loan has been tied up for a 5-year tenor and is bench-marked to SOFR (Secured Overnight Financing Rate), which is the benchmark rate for the loans denominated in USD.
The proceeds of the loan will be used towards refinance for on-lending to its borrowers in power, infrastructure and logistics sector for importing capital equipment.
Both the funds have been raised under REC’s market borrowing programme of Rs. 1.20 lakh crore for FY24.
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