RIL plans to raise $800 mn via bond sale

Reliance industries ltd

Reliance Industries is planning to raise $800 mn through a 10-year bond sale.

The proceeds of the issue will be utilised for refinancing of the existing borrowings.

While, Moody’s Investors Service has assigned a Baa2 rating to the proposed USD-denominated senior unsecured bonds of Reliance Industries Limited (RIL). The outlook on the rating is stable.

Moody’s anticipates that RIL’s RCF/adjusted net debt should improve to above 20% in fiscal 2018, a level which would be appropriate for its ratings.

Transaction Highlights
Lowest coupon ever achieved by an Indian corporate for a 10 year issuance

Tightest ever spread over US Treasury for an Indian entity for a 10 year issuance

Tightest ever spread over US Treasury for a 10 year BBB corporate issuance from Asia ex-Japan since global financial crisis

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%. The Notes will be denominated in US dollars, and will bear fixed interest of 3.667% p.a., with interest payable semi-annually in arrears and shall rank pari passu with all other unsecured and unsubordinated obligations of the Company. The Company will use the proceeds to redeem its existing US$ 800 million 5.875% senior perpetual fixed rate unsecured notes pursuant to the terms of such notes.

The Notes were over 1.6 times over-subscribed across 90 accounts.

In terms of geographic distribution, the Notes were distributed 62% in Asia, 13% in Europe and 25% in the United States. In terms of investor distribution, the Notes were distributed to high quality fixed income accounts: 57% to fund managers, 26% to insurance companies and pension funds; 11% to banks and 6% to public sector.

V. Srikanth, Joint Chief Financial Officer of RIL, commented, “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, we successfully concluded a swift intra-day execution to capitalize on the market window. We are delighted to have issued 10 year bonds at the lowest coupon ever for an Indian corporate.”

BofA Merrill Lynch, Citigroup and HSBC acted as Joint Global Coordinators. Barclays, J. P. Morgan and Standard Chartered Bank acted as Active Joint Bookrunners. ANZ, BNP PARIBAS, Crédit Agricole CIB, DBS Bank Ltd., Deutsche Bank, Mizuho Securities, Morgan Stanley, Scotiabank, SMBC Nikko and Société Générale Corporate & Investment Banking acted as Passive Bookrunners.