UPDATE 1-India New Issue-ReNew Energy Global arm sets coupon for green dollar bonds

(Updates with details from company)

MUMBAI, April 20 (Reuters) - A subsidiary of ReNew Energy Global Plc has set coupon for its planned green dollar bonds maturing in three years and three months, two merchant bankers said on Thursday.

Mauritius-incorporated Diamond II Ltd will raise $400 million via this bond issue at a yield of 8.15%, which is lower than initial guidance of around 8.50%, they said.

"The bonds carry a coupon of 7.95% and the proceeds from the issue will be used to refinance existing dollar debt and fund various growth initiatives," the company said in a release.

The order book was oversubscribed about four times with a total investor demand in excess of $1.5 billion, resulting in 35 bps tightening of pricing, it added.

ReNew Energy Global is the parent company of ReNew Power Pvt Ltd.

Analysts at CreditSights has said the fair value of investment in this issue would be 9.2%.

The bonds are secured by a 100% share pledge from the issuer, with 60% security cover from fixed assets, and are rated Ba3/BB– by Moody's and Fitch Ratings respectively.

"Strong investor demand from global investors underscores the growing demand for renewables...," said Kailash Vaswani, ReNew's president – Corporate Finance.

Barclays, Deutsche Bank, HSBC, JP Morgan, Standard Chartered Bank and BNP Paribas were the global coordinators as well as joint bookrunners.

DBS Bank, Mizuho, MUFG, SMBC Nikko and Societe Generale were the joint bookrunners for the issue. (Reporting by Bhakti Tambe and Dharamraj Dhutia; Editing by Varun H K and Shailesh Kuber)