Suzlon issues $650m wind bond, credit-enhanced by State Bank of India – first step in growing an Indian corp climate bond mkt?

Suzlon issues $650m wind bond, credit-enhanced by State Bank of India – first step in growing an Indian corp climate bond mkt?

Posted on 26. Mar, 2013 by  in blog

USD-denominated, 5 year, 4.97%, Baa2.

India had been trying to get a corporate bond market going for 15 years – search “growing India corporate bonds” and you’ll find papers on the subject from the Reserve Bank of India, Bank of International Settlement and others scattered over past years.

The latest Indian 5 year plan has this as a priority – and has green finance as a priority in a separate section.

India has a particular need: a miniscule local corporate bond market means restricted financing options for business, including for renewable and energy efficient building developers – diversity with financing options helps drive down costs of finance.

India also needs suitable instruments – e.g. corporate bonds – to attract some of the vast amount of capital currently going into buying gold and inflating the property market – a misallocation of domestic savings if ever there was one.

 

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