Mumbai, Feb 7 (PTI) Largest private sector lender HDFC Bank on Wednesday said it has raised USD 300 million in its maiden sustainable finance bond issue.

The money raised is part of the USD 750 million bond-raise which was announced on Tuesday, a statement said, adding that the papers will be listed on the GIFT City.

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The USD 300 million sustainable finance bonds have been raised for a tenure of three years at a spread of 0.95 per cent over the US treasury, while the remaining USD 450 million will be repaid in five years at 1.08 per cent over the US Treasury, the statement said.

The spreads are the tightest by an Indian issuer, it said.

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The bank said proceeds of the sustainable finance bond will be utilised for funding green and social loans in accordance with the sustainable finance, while the rest will be deployed for financing general banking activities.

HDFC group head for treasury Arup Rakshit elaborated that the sustainable finance bonds funds will be prioritised for lending towards electric vehicles, small businesses, and affordable housing.

"We are strongly committed towards building a green and social portfolio even as we continue adhering to the bank's risk philosophy," he added.

The paper was rated Baa3 (stable) by Moody's and BBB- (stable) by S&P.

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