RIL Chairman Mukesh Ambani. (PC-MoneyControl)
Reliance Industries (RIL) said on January 6 it has raised $4 billion in the largest ever foreign currency bond issuance from India. The securities of the oil-to-telecom conglomerate were “nearly three times oversubscribed with a peak order book aggregating $11.5 billion,” as per a presser released by the Mukesh Ambani-led company.
Here are the key highlights of India Inc’s largest forex bond issue:
RIL’s note issuance of US dollar bonds was done in three tranches – $1.5 billion for 10 years at 2.875 percent, $1.75 billion for 30 years at 3.625 percent, and $750 million for a 40-year term at a 3.750 percent coupon rate.
“The mega issue was the largest debt capital market transaction for the company and had the tightest credit spreads across each of the long-dated tenors for any corporate in India.”
The issue has the lowest coupon achieved for benchmark 30-year and 40-year issuances and is the first-ever 40-year tranche by a ‘BBB’ rated private sector corporate from Asia, excluding Japan.
According to RIL, the notes received orders from over 200 accounts in Asia, Europe, and the United States.
“The notes were distributed to high quality fixed income accounts: 69 percent to fund managers, 24 percent to insurance companies, five percent to banks, and two percent to public institutions.”
Rating agency Moody’s had rated the bond ‘Baa2’ while S&P Global Rating gave it ‘BBB+’; both had a ‘stable’ outlook on the bonds.
The interest on the notes will be payable semi-annually in arrears, and the notes shall rank at par with all other unsecured and unsubordinated obligations of RIL.
The funds raised through the debt issuance will primarily be used to refinance existing borrowings.
A part of it will go towards refinancing the $1.5 billion worth of debt that is due to mature in February.
The notes have been priced competitively at 120 basis points, 160 basis points, and 170 basis points over the respective US Treasuries benchmark.
The names of the investors who subscribed to the bonds have not been revealed by Reliance Industries.
Per market sources, the bidders included BFAM Opportunities Fund, China Life Insurance, Mizuho Bank, Fidelity, and UOB Asset Management.
BofA Securities, Citigroup, and HSBC were the joint global coordinators to the issue. While BofA Securities, Citigroup, HSBC, Barclays, JP Morgan, and MUFG acted as joint active book-runners, ANZ, BNP PARIBAS, Crédit Agricole CIB, DBS Bank Ltd., Mizuho Securities, SMBC Nikko, Standard Chartered Bank, and SBI London Branch were the joint passive book-runners.
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