London Stock Exchange welcomes Indian Railway Finance Corporation’s (IRFC) first Green Bond

  • Indian Railway Finance Corporation (IRFC) issues $500 million green bond on London Stock Exchange’s new International Securities Market (ISM)
  • Sixth green bond by an Indian issuer on London Stock Exchange
  • London Stock Exchange welcomes IRFC Managing Director and Director of Finance to celebrate the launch of the debut green bond
  • Reinforces London’s status as most international financial centre and India’s funding partner of choice

London Stock Exchange today welcomes Indian Railway Finance Corporation’s (IRFC) first green bond. The ten year dated green bond raised $500 million with an annual yield of 3.835 per cent and listed on London Stock Exchange’s new International Securities Market. The bond was more than three times oversubscribed and received strong international investor support.

IRFC will use the proceeds of the bond to finance or refinance infrastructure for dedicated freight railway lines and public passenger transport. The bond demonstrates Indian Prime Minister, Narendra Modi’s 2015 commitment to funding India’s infrastructure and growth through the issuance of over £1 billion worth of Masala bonds.
 
The green bond is certified by Climate Bonds Initiative, an international, investor-focused not-for-profit, which helps build robust and transparent assurance frameworks around green bond investment.
 
Mr. Shri S.K.Pattanayak, Managing Director, IRFC and Mr. Shri Niraj Kumar, Director of Finance, IRFC, together with Mr. Dinesh K. Patnaik, Deputy Indian HC to the UK joined Nikhil Rathi, CEO of London Stock Exchange plc, to celebrate the green bond listing this morning. 
 
This is the sixth green bond transaction on London Stock Exchange by an Indian issuer and fourth on London Stock Exchange’s new International Securities Market (ISM), reinforcing London Stock Exchange’s position as a leading global venue for international debt and sustainable fundraising. Green bonds in London have raised over $3.2 billion in November 2017 alone.
 
To date in 2017, there has been 64% growth in the number of green bonds listed on London Stock Exchange, compared with 2016 and a 65% increase in money raised. In 2017 year-to-date 23 green bonds have listed in London, raising $9.4 billion, compared to 14 green bonds which raised $5.7 billion in 2016. In total, there are 61 green bonds listed in London that have raised over $20 billion in aggregate terms across seven currencies.
 
Nikhil Rathi, CEO, London Stock Exchange plc, said:
“I am honoured to celebrate this landmark transaction with the Managing Director and Director of Finance of IRFC. Today’s green bond listing is a significant milestone for India and IRFC, allowing the country to further  tap a dynamic new international channel of finance for Indian infrastructure. In particular we are honoured to support the financing of the Indian Railways, the heartbeat of the Indian economy.
 
“Today also re-enforces the progress being made in the Energy for Growth partnership established in April between the UK and India, strengthening London’s position as India's closest and most valued funding partner.
 
“There is an undeniable shift in momentum in the green and sustainable financing across the globe. London Stock Exchange Group is at the forefront of this green financing movement, developing innovative products and services in partnership with our customers.”
 
Mr. S. K. Pattanayak, Managing Director, Indian Railway Finance Corporation (IRFC) said:
“IRFC is delighted to launch its first green bond on London Stock Exchange today. Our debut green bond is a significant milestone for IRFC, supporting the company’s ambitious infrastructure green projects, which includes procurement of rolling stocks electrifying rail tracks across India.
 
“Not only was the bond three times oversubscribed but today we have also achieved our aim, through London, to increase our investor base across EMEA.”
 
Sean Kidney CEO Climate Bonds Initiative said:
"Indian Railways is the third state backed entity to seek global exposure by issuing a certified green bond and listing in London. This IRFC green bond and the previous issuance from IREDA and PFC are a sign of the enormous market opportunities for international investors in green energy, transport and infrastructure to meet India's intertwined climate, energy and development goals."
 
IRFC’s green bond is the latest in a long line of global firsts for London Stock Exchange Group, including numerous high profile Indian and green bond issuances on London Stock Exchange:

  • LSEG is home to a number of global first green bond issuances from Bank of China and Agricultural Bank of China, India’s Axis Bank, Development Bank of Japan and the IFC, a member of the World Bank Group
  • In 2016, 14 new green bonds in 5 different currencies raised over $5 billion; in total 61 green bonds are listed on London Stock Exchange that have raised over $20 billion
  • On 7 November 2016, FTSE Russell, the global index provider, announced the creation of a new index, the FTSE All-World Ex CW Climate Balanced Factor Index, the first to combine a smart beta factor approach alongside climate change considerations
  • The index has been chosen by Legal & General Investment Management for its new Future World Fund, which HSBC Bank UK Pension Scheme has selected for its equity default option, worth £4 billion, in its DC scheme
  • In 2015 London Stock Exchange launched its dedicated green bond segments creating strict admission criteria aligned with ICMA’s Green Bonds Principles
  • There are 37 ‘green companies’ which have raised over $7 billion combined in London including 13 renewable investment funds with a combined market cap of over $5 billion

LSEG has been supporting investors and issuers in the transition to a low-carbon and sustainable economy for over a decade, developing innovative products and services in close collaboration with the market. Its comprehensive sustainable finance offering is focused on green financing for issuers (both debt and equity), indexing and analytics. London’s markets are home to a diversified portfolio of green bonds, ETFs, renewable investment funds and corporates whose business models encompass alternative energy.
 
FTSE Russell, the global index leader, has long been a pioneer in the development of benchmarking tools enabling investors to integrate ESG factors in their portfolios and to track the increasing shift towards a green economy.
 
LSEG joined the UN’s Sustainable Stock Exchanges initiative as a Partner Exchange in 2014 and has also signed The Paris Pledge for Action.
 
Further information can be found online at our Global Sustainable Investment Centre:
http://www.lseg.com/sustainable
 

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