HDFC Bank will hold roadshows in Europe and Asia starting today to gauge investors’ interest in their proposed USD 750mn bond issuance planned later this week, said people with knowledge.

The private lender will issue the dollar bonds out of its branch in Gujarat International Finance Tec-City (GIFT city)

The bank has proposed to raise three-year bonds tagged as sustainability bonds and a five-year bond tagged as conventional bonds.

The bank has appointed Barclays, Bank of America, JP Morgan, MUFG and Standard Chartered as arrangers for the bond issuance.

HDFC Bank did not immediately respond to ET’s request for comments.

HDFC Bank had raised senior unsecured USD 750mn bonds in February 2023 from its Gift City branch. At that time, the bank had paid a coupon of 5.686% on a three-year bond, a notice to exchanges stated.Sustainability bonds are bonds where the proceeds will be exclusively used to finance environmentally friendly projects. “Green bonds specifically finance projects with direct environmental benefits, while sustainability bonds may cover a broader range of socially responsible initiatives, including environmental, social, and governance (ESG) factors,” Venkatakrishnan Srinivas, founder and managing partner of Rockfort Fincap, a debt advisory firm. “Both contribute to sustainable finance by attracting investors committed to supporting environmentally conscious initiatives,” he added.The conventional bonds are those bonds that have fixed interest and principal payments.

The bonds are rated by Moody’s Rating Services as Baa3 and S&P as BBB-.

While assigning rating on August 23, 2023, Moody’s stated “HDFC Bank’s Baa3 long-term deposit rating considers its strong and consistent asset quality, profitability and capital, which are better than the Indian banking system averages. The bank’s solid commercial and retail banking franchise, reflected in its status as the largest private sector bank in India by assets, supports its funding and liquidity.”

Providing a stable outlook for the bank, Moody’s stated, The bank’s rating and baseline Credit Assessment (BCA) are well positioned to weather volatilities in the external environment because of its solid capital, and strong funding and liquidity.

However, Moody’s could downgrade ratings if India’s sovereign rating is downgraded. “The BCA could be downgraded if the bank’s financial fundamentals deteriorate significantly, specifically if its tangible common equity/risk-weighted assets decline to below 12% and net income/tangible assets fall below 1%. Any weakening in HDFC Bank’s funding and liquidity would also be negative for its BCA,” it added.

HDFC Bank shares were traded at 1448.55, up 0.12% over previous trading day, at the Bombay Stock Exchange at 1.35pm today.

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