Reliance Industries said it has raised $800 million by selling 10-year bonds – the first offering since Moody’s raised India’s sovereign rating.
The bonds were priced at 3.66 per cent, the lowest coupon ever achieved by an Indian corporate for a 10-year issuance, the company said in a statement.
RIL, which is rated the same as the sovereign, will use the proceeds to refinance existing debt. This was the first dollar note this year.
The note by RIL, India’s largest company, was assigned ‘BBB+’ rating by S&P and ‘Baa2’ by Moody’s Investors Service.
“The notes have been priced at 130 basis points over the 10-year US Treasury Note, at a price of 100 to yield at 3.667 per cent,” the statement said.
They will bear fixed interest of 3.66 per cent per annum, with interest payable semi-annually in arrears and shall rank pari passu with all other unsecured and unsubordinated obligations of the company.
This, RIL said, was the tightest ever spread over US Treasury for an Indian entity for a 10-year issuance. Also, it was the tightest ever spread over US Treasury for a 10-year BBB corporate issuance from Asia ex-Japan since the global financial crisis.
“The company will use the proceeds to redeem its existing $800 million 5.875 per cent senior perpetual fixed rate unsecured notes pursuant to the terms of such notes,” it said.
The notes were over 1.6 times oversubscribed across 90 accounts.
V Srikanth, Joint Chief Financial Officer, RIL, said, “This refinancing transaction was well received by high quality investors across asset managers, insurance companies and banks and helped us achieve substantial savings in interest cost over the life of the notes.”
Issued against the backdrop of the upgrade of the country ratings by Moody’s, RIL successfully concluded a swift intra- day execution to capitalise on the market window, he said. “We are delighted to have issued 10-year bonds at the lowest coupon ever for an Indian corporate.”