Mindspace Business Parks REIT Raises Rs 550 Crore From IFC Through Sustainability Linked Bonds

Mindspace Business Parks REIT, a company backed by K Raheja Corp, has secured Rs 550 crore in funding from the International Finance Corp., a part of the World Bank Group.

The capital was raised through the IFC's subscription to the REIT's sustainability-linked bonds, bringing Mindspace REIT's total SLB issuance to Rs 1,200 crore, as per a press release on Wednesday. This recent deal follows a similar transaction last year where the REIT raised Rs 650 crore.

Mindspace REIT also noted that this marks the first issuance of a sustainability-linked bond since the Securities and Exchange Board of India introduced a new framework for debt securities that comply with environmental, social, and governance standards.

Ramesh Nair, managing director and chief executive officer of Mindspace REIT, highlighted the significance of the partnership. "With this issuance, we're taking a big step forward on our sustainability journey," Nair said. "Being the first REIT to raise Sustainability Linked Bonds under SEBI's new ESG framework shows our intent to lead from the front. Partnering with IFC gives us global backing, and it will help us drive energy efficiency, add more green-certified space, and build a portfolio that’s ready for the future."

The Rs 550-crore SLB has an eight-year tenure and was legally advised by law firm Shardul Amarchand Mangaldas. The bond was awarded a 'AAA' rating by ICRA and, according to sources, has a semi-annual coupon of 7.414%.

Sustainability-linked bonds are a type of debt security where the funds are used to help the issuer meet pre-determined ESG objectives. Some of these bonds include a provision for a lower interest rate once the agreed-upon sustainability targets are met.