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21 November 2017
 |
Reliance
Industries Ltd(The
Total Investment & Insurance Solutions)
Reliance
Industries Ltd (RIL) on Tuesday said it has raised $800 million by selling
10-year bonds in the first offering since Moody's last week raised India's
sovereign rating after 14 years.
According
to a Mukesh Ambani-led RIL release here, the bonds, priced at 3.66 per cent,
were the lowest coupon ever achieved by an Indian corporate for a 10-year
issuance, the company.
"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," it 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," it added.
RIL
will use the proceeds to refinance existing debt. India's largest company has a
debt of around $12 billion (Rs 75,000 crore) on its books, a major portion of
which will mature next year.
"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 oversubscribed more than 1.6 times across 90 accounts.
The
statement said this was the tightest ever spread over US Treasury for an Indian
entity for a 10-year issuance, as also the tightest ever spread over US
Treasury for a 10-year BBB corporate issuance from Asia minus Japan since the
global financial crisis.
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, according to Joint Chief Financial Officer V. Srikanth.
"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," he
said.
With
the RIL rated at par with the sovereign rating, following the upgrade by
Moody's of India's ranking, RIL too has been assigned a 'Baa2' grade.
Last
week, US credit rating agency Moody Investor Service upgraded India's sovereign
ratings to 'Baa2' from its lowest investment grade of 'Baa3' and changed the
outlook for the country's rating to 'stable' from 'positive'.
It
said this was based on the Indian government's "wide-ranging programme of
economic and institutional reforms".
On
the rationale for RIL's 'Baa2' rating, Moody's said that it reflects the
company's strong ability to generate operating cash flows, with Ebidta, or
operating income, exceeding $10 billion from its integrated refining and
petrochemical operations, as well from its new digital services business.The Total Investment & Insurance Solutions
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