Money & Banking

Shriram Transport Finance raises $475 million through social bonds

BL Mumbai Bureau | | Updated on: Jan 11, 2022
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The company has engaged with investors globally, including from Hong Kong, Singapore, London and the US

Shriram Transport Finance Company (STFC) has raised $475 millionvia‘Senior Secured Social Bonds’ for a 3.5-year tenor at an interest rate of 4.15 per cent.

This is the 7th USDollarbond issuance by the asset financing company since the relaxation in External Commercial Borrowing (ECB)guidelines.

The proceeds from the social bond (Fixed Rate Senior Secured 144A /Reg S Bond)would be used for employment generation, including through micro, small, and medium-sized enterprise (MSME) financing, STFC said in a statement.

The company has engaged with investors with an appetite for social bonds across the globe--namely in Hong Kong, Singapore, London and the US. The final order book was over-subscribed 2.5 times, according to the statement.

“On the back of strong investor interest, the transaction was launched with an initial price guidance of around 4.45per cent.

“Following strong book building, supported by high quality long only investors, the company was able to tighten pricing by 30basis points (bps) to 4.15per cent,” the statement said.

The transaction witnessed global investor participation with 66per centfrom Asia, 18per centfrom EMEA and 16per centfrom the US, with 93per centinvestment from asset managers, including insurance companies, 4per centfrom banks and 3per centfrom private banks and others.

Umesh Revankar, Vice-Chairman and MD of STFC,said: “The pandemic has magnified the underlying social issues and the need to build back better, which social bonds can address.

“We are seeing rising demand from investors for impact investing ... we are committed to financing towards socioeconomic necessities with a large multiplier effect.”

Published on January 11, 2022

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