Moody’s assigns GB1 grade to Axis Bank’s green bond issue


Moody’s Investors Service (Moody’s) has assigned Green Bond Assessment of GB1 (Excellent) to Axis Bank Ltd’s debut $500-million green bond issued in June 2016.

The senior, unsecured bond was priced at a coupon of 2.875 per cent and maturity of five years. Notably, the transaction was the first green bond issued by an Indian entity to receive Climate Bonds Initiative certification, and the first US dollar bond priced by an Asian bank certified by Climate Bonds Initiative.

“Axis Bank’s offering represented a significant milestone for India’s green bond market,” Rahul Ghosh, Moody’s Senior Vice President,said in a statement.

“The bank’s excellent organisation and oversight structure and track record of timely impact reporting underscore the assignment of our GB1 assessment.”

Assessment rationale

GB1 grade is supported by the bank’s full allocation of proceeds to finance investments within three sectors — renewable energy, low carbon transport and low carbon buildings — in alignment with the Climate Bond Initiative’s Climate Bond Standard version 2.0 and Green Bond Principles. As of March 31, 2018, all proceeds had been allocated to eligible activities.

The green bond offering supports Axis Bank’s broader sustainability objectives. The issuer has in place an internal sustainability governance structure to outline its long-term vision and strategy, and adopted a sustainable lending policy in April 2016, based on internationally-recognised frameworks, to strengthen its internal environmental and social risk assessment processes.

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