London-based energy major Vedanta Resources, which owns a clutch of operating companies in the country on Wednesday raised $1 billion through an 5-year bond sale to overseas investors at a fixed coupon of 6.375 per cent.
The Anil Agrawal-promoted company said the proceeds from the bond sale will "proactively address the refinancing liabilities of the company over next two years."
This is the largest single tranche G3 high yield bond issuance ex-Japan since 2015, the company said in a statement issued from London, adding it expects the bonds to be rated B3 by Moody's and B+ by S&P. G3 bonds mean debt issued in the US dollars, the yen and the euros. The London Stock Exchange-listed Vedanta Resources said the bonds are due in 2022 and will be traded on the Singapore Stock Exchange.
The Reg S bonds were sold in private offering to qualified institutional buyers under Rule 144A of the US Securities Act of 1933 and is expected to close on January 30.
"Vedanta intends to use the net proceeds from this offering primarily to fund its offer to purchase for cash any and all of its outstanding $750,000,000 bonds due 2018 that offers 9.50 per cent interest and the $1,200,000,000 bonds due 2019 attracting 6 per cent coupon and also to repay its other existing debts.
"Vedanta has received and accepted purchase of around $370,868,000 of the 2018 bonds and $425,028,000 of the 2019 bonds (excluding $227,000 of the 2018 bonds and $200,000 of the 2019 bonds that remain subject to the guaranteed delivery procedures)," the company said.
With this transaction, Vedanta will be refinancing a part of its 2018 and 2019 maturities and extended average debt maturity, it added.
"The issuance got strong investor interest, making it the largest single-tranche G3 high yield bond issuance from Asia ex-Japan since 2015," it. High yielding bonds is another word for below investment grade debt or junk bonds.
Commenting on the sale, Vedanta chief executive Tom Albanese said this transaction is in line with our financial strategy to extend maturities, optimise the balance sheet, and create value for stakeholders.
Barclays, Citigroup, JP Morgan and Standard Chartered Bank were the joint global coordinators, joint lead managers and joint bookrunners. It can be noted on January 17, the nation's largest lender State Bank had raised $500 million through an international bond sale of five-year bonds at coupon of 3.306 per cent per annum and getting oversubscribed three times.