Yours faithfully, For Rural Electrification Corporation Limited.

Transcription

1 र रल इल क ट र फ क शन क रप र शन लल ल ट ड RURAL ELECTRIFICATION CORPORATION LIMITED भ रत सरक र क उघम/ (A Government of India Enterprise) Regd Office: Core-4, SCOPE Complex, 7 Lodi Road New Delhi Tele. : Fax : sanjayk@recl.nic.in CIN : L40101DL1969GOI Website No. REC/Finance/Resource/Green Bond/17-18 Date: May 23, 2017 To Sub: Raising of Global Green Bonds in US Dollar equivalent to US$300 million with green shoe option to upsize upto US$470 million under Regulation S (Reg S) by Rural Electrification Corporation Limited (REC)-Request for Proposal Dear Sirs, Rural Electrification Corporation Limited (REC) is inviting bids for Appointment of Lead Manager(s) for proposed Global Green bonds issuance for raising of Global Green Bonds in US Dollar equivalent to US$300 million with green shoe option to upsize upto US$470 million under Regulation S (Reg S) under its existing U.S.$1,000,000,000 Medium Term Note (MTN) Programme. Necessary bidding/tender document, comprising of the following, is enclosed: (i) REC Profile, Scope of Work and Instruction to Bidders on submission of Section-I Proposal (ii) Technical Proposal Section-II (iii) Financial Proposal Section-III The bids are to be submitted physically either in person or through post in a sealed envelope and may be addressed to Mr. Sanjay Kumar, Additional General Manager (Finance), Rural Electrification Corporation Limited, Core-4, Scope Complex, 7, Lodhi Road, New Delhi The Tender document can also be downloaded from the website tender link given on REC Website Incomplete and/or ambiguous and/or conditional and/or late response is liable to be ignored/ summarily rejected. In case of any clarification, you may contact undersigned or Mr. Supreet Pandya, Dy. Manager (Finance) on supreetpandya@recl.nic.in, Call: / Mobile: Thanking you, Yours faithfully, For Rural Electrification Corporation Limited. ----sd---- Sanjay Kumar Additional General Manager (Finance) sanjayk@recl.nic.in Mob : Direct :

2 TENDER DOCUMENT TENDER NO: REC/Finance/Resource/Green Bond/17-18 Appointment of Lead Managers for proposed REC Global Green bonds issuance (i) (ii) (iii) Last Date for Submission of Bids: May 31, 2017, Time: 16:00 Hours (IST) Date of Opening of Technical Bid: To be notified Date of Opening of Financial Bid: To be notified RURAL ELECTRIFICATION CORPORATION LIMITED (A Govt of India Enterprise) Core-4, Scope Complex, 7, Lodi Road, New Delhi Page 2 of 11

3 SECTION I REC Profile, Brief about proposed Green Bond issuance, Scope of Work and Instruction to Bidders on submission of Proposal 1. REC profile 1.1 Rural Electrification Corporation Limited (REC) is a Navratna public sector enterprise and a Non-Banking Finance Company with Infrastructure Finance Company status. It is engaged in the financing and promotion of transmission, distribution and generation including renewable energy projects throughout Indian power infrastructure sector and occupies a key position in the GoI's plans for the growth of the Indian power sector. The President of India, acting through nominees from Ministry of Power, holds 58.86% of the issued and paid up equity capital of REC. 1.2 REC enjoys international credit rating from International Credit Rating Agencies Moody s and Fitch which are Baa3 and BBB- respectively equivalent to sovereign rating of India. Baa3 rated obligations denote moderate credit risk and BBB- rated obligations denote that expectations of default risk are currently low. Further, REC continued to get the highest rating AAA from domestic rating agencies, the highest assigned by CRISIL, CARE, IRRPL and ICRA for its specific Resource Mobilization programme. Consistent high ratings bear testimony to REC s stature as an institution with strong fundamentals and inherent financial strength. 1.3 In December 2016, REC has successfully set up MTN programmer for USD 1 Billion, which is listed on the Singapore Stock Exchange. 1.4 REC has been actively raising funds from international markets in the form of Term Loans and Bonds under RBI s approval route every year. Additionally, REC has access to Official Development Assistance (ODA) loans from multilateral agencies namely JICA and KFW. As at March 31, 2017 the total foreign currency borrowings outstanding amounts to approx. USD 3.10 billion in various currencies viz. USD, Euro and JPY. REC has also raised Foreign Currency Reg-S Bonds in 2011 and 2012 amounting to USD 500 million and CHF 200 Million respectively, which have been successfully repaid on their due dates. 2. Brief about proposed Green Bond issuance 2.1 The Board of Directors of REC have approved the market borrowing programme for the Year and have also authorized the company to raise the requisite sum from the market(s), which inter-alia include borrowings from the offshore market(s) including Green Bonds. 2.2 Considering the potential of Renewable Energy in India and the Government s thrust on the same, REC is considering the option of raising funds through Global Green Bonds in US Dollar equivalent to US$300 million with green shoe option to upsize upto US$470 million under Regulation S (Reg S) for a tenor of 5 to 10 years, as advised by the Lead Manager(s) based on the market conditions and subject to RBI s extant guidelines on ECBs. The bonds shall be raised under REC s existing U.S.$1,000,000,000 Medium Term Note (MTN) Programme, listed on Singapore Stock Exchange. The issuance thereunder will be on an unsecured basis without any guarantee or Letter of Comfort from Government of India but on the financial strength of REC. Page 3 of 11

4 2.3 REC has already appointed KPMG as Assurance Service Provider and to assist REC in obtaining certification by Climate Bond Initiative (CBI), London for proposed Green Global bonds issuance. An application in this regard is being submitted to CBI. 2.4 Accordingly, you are requested to submit your proposal to act as Lead Manager for the proposed REC Global Green Bonds in US Dollar issuance, the proceeds of which shall be allocated for the financing of REC s existing projects including re-financing and new Eligible Green Projects in Indian Renewable Energy sector. In case REC decides to appoint more than one Lead Manager, all the lead managers appointed shall together be called as Joint Lead Managers. Once engaged, the appointment of the Lead Manager(s) shall remain valid till the issuance is complete in all respects. 2.5 Key terms of the proposed bonds issuance are highlighted below: Type of Bond REC Global Green Bonds in US Dollar; all payments in respect of the Notes will be made in US Dollar (USD) Issuer Rural Electrification corporation Limited (REC) Currency USD Issue Size Equivalent to US$ 300 million with green shoe option to upsize upto US$470 million Purpose The proceeds will be allocated for the financing of existing projects including re-financing and new Eligible Green Projects in Indian Renewable Energy sector, in accordance with REC s Green Bond framework prepared in consultation with KPMG, expected to be approved by Climate Bond Initiative (CBI), London. Green Bond REC Green Global Bonds in US Dollar is expected to be certified as Green Bonds by Climate Bond Initiative (CBI), London. An application in this regard is being submitted to CBI. Security Unsecured Rating Rating of the Bonds to be expected from International Credit Rating Agencies Moody s and/ or Fitch The issuer rating of REC as on date stands at Baa3 and BBB- respectively. Tenor 5 to 10 years, depending on the market conditions. Repayment Bullet repayment on date of Maturity Regulation Regulation S (Reg S) Interest Payable Annually RBI The transaction will be in accordance with the following RBI guidelines: Master Direction - External Commercial Borrowings, Trade Credit, Borrowing and Lending in Foreign Currency by Authorised Dealers and Persons other than Authorised Dealers dated January 01, 2016 (updated till February 23, 2017) or as amended from time to time. Withholding Tax 1. All the payments to the Mandated Lead Managers, Lenders, Facility Agent and other intermediaries and the interest paid by REC to nonresident lenders shall be made free and clear of withholding tax and service tax, as applicable. 2. To meet the mandatory requirement of Section 206-AA of the Indian Income Tax Act, 1961, Permanent Account Number (PAN) and other KYC documents may be required in respect of the Mandated Lead Managers and other intermediaries and shall be provided to REC (including Tax Residency Certificate, Form 10F, Declaration of no Permanent Establishment (PE) in India etc., to enable it to avail the benefit of lower rate of withholding tax. In the event of REC requiring to pay withholding tax at a higher rate than Page 4 of 11

5 Governing Law US Law Clear Clause Market Documentation Validity of the Offer the lower rate specified above due to non-submission of PAN or any other document/s as may be required by the Income tax Authorities in India, the liability of REC, shall be limited to the extent of the lower rate of withholding tax or such other levy, which REC would otherwise have paid. English Law 1. Investors need to comply with the US FATCA provisions and would provide the required certificate to REC to this effect. 2. REC shall not be made liable to increase any payment (gross up) in respect of a FATCA deduction on account of payments to Lead Managers etc. REC reserves it s right to raise funds in any currency through alternate market/modes i.e. term loan/syndicated term loans including loans from multilateral financial institutions like JICA, KfW, WB etc. from offshore markets and loans/bonds or any other mode in the domestic currency/domestic markets in India. REC s existing USD 1 Billion Medium Term Note Programme document will be used for this transaction. 60 Days from the submission of the proposal, which may be extended further with the mutual consent of Bidder and REC. 3. Scope of the work 3.1 The broad scope of work of the lead Manager(s) shall inter-alia include all aspect of arranging the issuance such as updation of REC s existing MTN program; coordination with counsels/agencies/intermediaries etc.; completion of all documentations; assist and secure statutory/regulatory approvals and compliances; liaison with Rating Agencies; draw up strategy for the offering, marketing; roadshows/meetings with investors, logistics, pricing, listing, etc. and any matter incidental thereto. The above scope of work is indicative and any other work that may be required for successful issuance of REC s Global Green Bonds in US Dollar will form part of the scope of work/services of Lead Manager(s). 3.2 The proposed Issue shall be in accordance with the applicable Reserve Bank of India (RBI) Guidelines. The Lead Manager(s) shall ensure compliance to the applicable RBI Guidelines particularly with respect to recognized investors, compliance with IOSCO /FATF jurisdictional requirements with respect to issue, subscription and transfer of Notes and undertake to provide the details of primary bond holders to REC immediately after the issuance of bonds for submission to the regulatory authorities. 3.3 The Lead Manager(s) shall facilitate REC in availing the Asian Bond Grant Scheme of the Monetary Authority of Singapore (MAS). 3.4 REC reserves the right to change the terms or parameters of the debt offering at any time 3.5 Proposal is invited on an inclusive of all expense basis 3.6 REC s decision shall be final and binding with regard to the scope of work/services of the Manger(s). 4. Instruction to Bidders on submission of Proposal 1.1 The proposal shall be submitted in two separate sealed envelopes as indicated below: i. Envelop I containing the Technical Proposal by the Bidder. The proposal should be in the manner, and format as prescribed as per Annexure-A of Section-II of this RFP. Page 5 of 11

6 ii. The technical proposal shall be evaluated in a judicious manner at the sole discretion of REC and marks shall be awarded out of a total of 100 maximum marks. The financial bid of only those Bidder(s) shall be considered for opening who scores 70 or more marks in the Technical Evaluation as given at Section-II. Envelop II containing the Financial Proposal in the manner and format as per Annexure- B of Section-III of this RFP. The financial proposal of only those Bidder(s) shall be opened, which qualify under technical evaluation. Please note that proposals with any conditionality will be summarily rejected The lowest financial offer as per Envelop II (Financial Bid) shall be assigned LI rank, the second lowest L2 and so on. In case there is a tie in the financial offer, then the bidder having a higher ranking in the technical criteria shall be given priority. In case REC decides to appoint more than one Joint Lead Managers, the L2 and L3 and so on bidders will be asked to match their rates with that of L1, till the requisite number of Bank(s)/FI(s)/lnstitution(s) agrees to such matching. The maximum Lead Arrangers will be at the sole discretion of REC, not exceeding four. 1.2 During the tenure of contract, the staff of Lead Manager(s) may be required to visit REC s office as per the requirement of REC. The financial proposal should be inclusive of the cost in respect of travelling, boarding, lodging etc. No TA/DA shall be paid by REC for this assignment. 1.3 The raising of above fund shall be subject to RBI s approval, other statutory authority or Government approvals in this regard. REC reserves the sole right to accept or reject any or all the Proposals thus received without assigning any reasons thereof. Please note that proposals with any conditionality will be summarily rejected. 1.4 In case the Bonds could not be issued (for any reason whatsoever) during the validity of the assignment, the Lead Manager / Joint Lead Manager shall not be paid any fees and each party shall bear its own costs and expenses. 1.5 The proposals should be signed by the authorized officer of the Bidder with the stamp. No proposal will be entertained after the appointed time and date. REC will not be responsible for any postal/courier delay. The proposals received after the appointed time and date will be summarily rejected. REC reserves the right to award/reject/amend the offer without assigning any reason thereof. Page 6 of 11

7 SECTION II : Technical Proposal Annexure - A (on the letter head of bidder) Proforma for submission of TECHNICAL PROPOSAL The Technical Proposal shall contain the relevant details of the Bidder in respect of each of the following criteria in the format as mentioned below: The Total marks for evaluation shall be 100 with distribution and criteria as follows: S.No. Criteria Marks To be filled by the Bidder 1. No. of issues handled as Lead / Joint Lead Arrangers from the period to as per Bloomberg s League Table Asia Ex- Japan G3 Currency Bonds (Bidder to provide the screenshot of the Bloomberg League Table as an evidence) 2. Volume (Million USD) of issues handled as Lead / Joint Lead Arrangers from the period to as per Bloomberg s League Table Asia Ex- Japan G3 Currency Bonds (Bidder to provide the screenshot of the Bloomberg League Table as an evidence) 3. Acted as Lead / Joint Lead Arrangers for Green Bond Issuances (in any of the currencies including INR) for Indian Issuers from the period to (Bidder to provide the details of the issuances as an evidence) 3. No. of issues handled as Lead / Joint Lead Arrangers for Green Bond Issuances (in any of the currencies including INR) for Global issuers from the period to as per Bloomberg s League Table Global Green Bonds - Corporate & Government (Bidder to provide the screenshot of the Bloomberg League Table as an evidence) 4. Volume (Million USD) of issues handled as Lead / Joint Lead Arrangers for Green Bond Issuances (in any of the currencies including INR) for Global issuers from the period to as per Bloomberg s League Table Global Green Bonds - Corporate & Government (Bidder to provide the screenshot of the Bloomberg League Table as an evidence) No. of Issue(s) Marks 1 to More than Maximum Marks : 10 Total Volume (Million USD) Marks Upto 5,000 5 More than 5, Maximum Marks : 10 5 (Yes / No) No. of Issue(s) Marks 1 to 10 5 More than Maximum Marks : 10 Total Volume (Million USD) Marks Upto 3,000 5 More than 3, Maximum Marks : 10 Page 7 of 11

8 S.No. Criteria Marks To be filled by the Bidder 5. Relationship with REC during the period to Nature of Relationship (a) Acted as Mandated Arranger for mobilising ECB Term Loan(s)/ Bond(s) during the period to , on its own or through its subsidiaries/ parent companies. Upto USD 250 million or equivalent More than USD 250 million or equivalent (b) Entered into derivative contract(s) with REC during the period to , on its own or through its subsidiaries/parent companies. (c) Acted as arranger for Domestic Bond issuances of REC during the period to , on its own or through its subsidiaries/parent companies. (d) Existing Sanctioned Domestic WCDL to REC outstanding as at , on its own or through its subsidiaries/parent companies. Marks Bidder is a Financial Sector Incentive (FSI) company in Singapore. (REC should be able to claim grant under Asian Bond Grant Scheme of MAS circular) (Bidder to enclose the proof of FSI Company) Maximum Marks : 35 Marks : 5 (Yes / No) Page 8 of 11

9 S.No. Criteria Marks To be filled by the Bidder 7. International distribution / physical Location Nos. Marks presence (No of sales team location for 1 to bond/branches) Europe More than 5 5 (Bidder to enclose a self-certification in this regard) 1 to UK More than 5 5 Asia 1 to More than 5 5 Maximum Marks : 15 Total marks 100 Note : All the above proofs/certifications be duly signed and stamped by the authorized signatory of the bidder. Any incorrect statement shall render the bidder disqualified at any stage of the bid and may also render it ineligible any future assignments with REC. Undertaking : We accept all the terms & conditions as mentioned in the RFP. I am fully authorized to sign the technical proposal on behalf of the bidder. Name & Signature of Bidder s Authorized Signatory along with the Stamp Page 9 of 11

10 SECTION III : Financial Proposal (on the letter head of bidder) Proforma for submission of FINANCIAL PROPOSAL Annexure - B Financial Proposal (to be read with Notes appended to Annexure-B) must be submitted on firm basis in the manner as specified below: ASSOCIATED COSTS TO THE ISSUE (on a Firm Basis) S. No. Particulars Currency Amount in respective currency a) Arrangement Fee / Lead Managers' Fee (to be quoted in US$ and not in %age) b) Printing expenses (to be quoted in US$) c) Road-show expenses (to be mentioned for one location only) (The tentative locations for road shows are Singapore, Hong Kong and London and/or any other location(s) as may be decided in consultation with the Lead Manager(s). In case, the number of locations are reduced or increased, the expenses shall be proportionately decreased or increased, as the case may be.) d) International Legal Counsel Fee for MTN programme updation, due diligence etc. (The International Legal Counsel (ILC) to REC s MTN programme is Allen and Overy.) e) Domestic Legal Counsel Fee for MTN programme updation, due diligence etc. (to be quoted in US$) (to be quoted in US$) (The Domestic Legal Counsel (DLC) to REC s MTN programme is Cyril Amarchand Mangaldas.) f) Listing fee on Singapore Stock Exchange (to be quoted in SGD) g) Listing fee on London Stock Exchange (to be quoted in GBP) h) Other expenses, if any (please specify) (to be quoted in US$) Total (For calculation purposes, conversion to USD, 1 US$ = INR, 1 US$ = 1.39 SGD, 1US$ = 0.77 GBP is to be considered.) Undertaking to be submitted by the Bidder: "We undertake that: (to be quoted in INR) Equivalent Amount in USD a) The financial proposal submitted hereunder shall remain valid for a period of 60 days from the last date for submission of proposal. b) No other costs/expenses/taxes/levies shall be payable by REC except for as mentioned in the Financial Proposal. c) We accept all the terms & conditions as mentioned in the RFP. In the event of any contradiction in the terms and conditions as mentioned in the RFP and our proposal, the decision of REC shall prevail. I am fully authorized to sign the financial proposal on behalf of the Bidder. Name & Signature of Bidder s Authorized Signatory along with the Stamp Page 10 of 11

11 Note: 1. Minimum amount of Arrangement fee to be quoted is USD 1 (US Dollar One only). In case of engagement of more than one Lead Manager, minimum fee for each one of the Lead Managers shall be USD 1 (US Dollar One only). 2. The above arrangement fee and other expenses should be quoted based on bond issuance equivalent to US$300 million with green shoe option upto US$ 470 million. The quantum will be decided as per the sole discretion of REC. 3. The Bank of New York Mellon, London Branch is the Principal Paying Agent. The expenses on Agency Fee and Rating Fee shall be paid directly by REC. 4. The expenses with regard to each of the intermediary have to be quoted on lump sum basis inclusive of all expenses/disbursements/taxes/levies and shall be free and clear of withholding tax and service tax, as applicable, which shall be borne by REC. In respect of Domestic Legal Counsel the fee is to be quoted on all-inclusive basis plus service tax as applicable which shall be subject to deduction of taxes, as applicable. 5. Road show expenses should be for one location. Number and locations of road shows shall be decided by REC in consultation with appointed Lead Manager(s). It is expected that one India based representatives of the Joint Lead Managers shall travel for road-shows. However, no additional amount shall be paid for the travel costs of representatives of Joint Lead Managers other than the fees as quoted above. Road show expenses should not include the airfare and lodging expenses of REC Team. REC, at its discretion, may or may not conduct roadshows for the transaction. In case REC decides not to hold road shows, no expenses on this account shall be payable by us. 6. Please note that the Bidder(s) are required to quote under all the heads compulsorily. In case of no charge, NIL shall be mentioned. 7. The lowest financial offer as per Envelop II (Financial Bid) shall be assigned LI rank, the second lowest L2 and so on. In case REC decides to appoint more than one Joint Lead Managers, the L2 and L3 and so on, bidders will be asked to match their rates with that of L1, till the requisite number of Bank(s)/FI(s)/lnstitution(s) agree to such matching. In case there is a tie in the financial offer of requisite number of Bank(s)/FI(s)/lnstitution(s), as may be decided by REC to be appointed, then the bidder having a higher ranking in the technical criteria shall be given priority. The maximum number of Lead Arrangers will be four at the sole discretion of REC. 8. Expenses quoted in the Financial Proposal except listing fees shall be payable only after the drawdown. ********* Page 11 of 11