Mumbai Nov 21 (IANS) 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.
--IANS
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