Business
REC raises USD 1.15 billion in August from 6 banks
State-owned REC on Wednesday said it raised USD 1.15 billion in August in two tranches from a consortium of six banks. Proceeds of the loans shall be utilized to fund power, infrastructure and logistics sector projects as permitted under the ECB guidelines of the Reserve Bank of India. The funds have been raised under REC’s Market Borrowing Programme of Rs 1.20 lakh crore for 2023-24.
“Tranche 1 of USD 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, while Tranche 2 of USD 645 million was raised 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,” an REC statement said. Both tranches taken together saw an aggregate commitment of USD 550 million from GIFT City IBUs.
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This is the highest ever commitment to REC from GIFT City IBUs in a single month, surpassing the earlier largest commitment of USD 345 million in December 2021. 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 loans denominated in USD. “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,” said Vivek Kumar Dewangan, Chairman and Managing Director, REC.
In a separate statement, the company said it has signed a Foreign Currency Term Loan Agreement for USD 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 benchmarked to SOFR . 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. The funds will be raised as part of REC’s Market Borrowing Programme of Rs 1.20 lakh crore for 2023-24.
