Reliance Industries has raised USD 1 billion in debt through a 10 year bond issue at an interest rates considered lowest in Asia and with almost no new-issue premium.
“The Notes will be denominated in US dollars, and will bear fixed interest of 4.125 percent per annum, with interest payable semi-annually in arrears,” RIL said, adding the funds will be utilised for ongoing capital expenditure.
This is the “lowest coupon ever achieved by an Asia ex Japan corporate issuer in the BBB category for a 10 year issuance with a size of USD 1 billion or more” the company said in a statement.
This is being seen as an achievement, considering that global issuers have been paying up to price their offerings in volatile markets and amid the immense volatility in oil prices.
RIL said it has priced its 144A/Reg S bonds to yield 240 basis points over US Treasuries Note at a 4.125 percent coupon.
Most of Asia ex-Japan’s US dollar deals have come with new-issue concessions of at least 7 basis point from the likes of Export-Import Bank of Korea, to as much as around 40-50 basis points from China Huarong Asset Management.
RIL said it received orders of over USD 4.5 billion from 272 accounts. Fund managers accounted for 62 percent of the orders, insurers and pension funds made up for 18 percent, banks for 10 percent, central banks, supranationals and agencies for 7 percent, and private banks for 3 percent.
US investors received the majority of the notes at 44 percent, while Asia took 31 percent while the remainder went to European buyers.
Bank of America Merrill Lynch, Citigroup, HSBC and Stadard Chartered were the joint global co-ordinators.
Barclays, Deutsche Bank, JP Morgan and Morgan Stanley were active bookrunners, and ANZ, BNP Paribas, Credit Agricole CIB and RBS were passive bookrunners.
V Srikanth, Joint Chief Financial Officer of RIL, said, “This transaction opened up the market for private sector corporate issuances out of Asia, against the backdrop of challenging market conditions. We successfully concluded a swift intra-day execution to capitalise on the market window and lock in long term funding at an attractive cost.”