JSW Steel has raised $1 billion by issuing sustainability-linked bonds (SLBs) in the overseas market, thus becoming the "first company in the steel sector globally to issue an SLB in a hard currency." The bond issue consisted of two tranches of 5.5 years and 10.5 years, for an amount of $500 million each.
"..Raised a total of $1 billion in the USD bond markets through a RegS/144A issuance, which was subscribed by high quality institutional investors across Asia, Middle East, Europe and the US," JSW Steel said in a regulatory filing to the stock exchanges.
Seshagiri Rao, joint managing director and group CFO, JSW Steel, said the overwhelming response garnered by the SLB issuance was a testimony of stakeholder confidence in JSW's commitment to climate change mitigation.
In the 10.5-year tranche, JSW Steel has committed to achieving a target of 1.95 tonnes of CO per tonne of crude steel produced (tCO2/tcs) by March 2030, representing a 23 per cent reduction from its 2020 levels.
JSW Steel will use the proceeds from the overseas bond issue to fund its capex plans and refinance debt.
Sustainability-linked bonds are beneficial to both the issuers and investors alike. Such bonds provide investors with a platform to invest in socially responsible companies, while companies are incentivised to improve their ESG (environmental, social, and governance) performance and diversify their source of long-term financing.
At 10:00 am, JSW Steel shares slid 1.7 per cent to Rs 678 on the BSE as against 0.45 per cent rise in the benchmark indices.