Tata Steel has sold $546.9 million of new 2014 convertible bonds to cut its funding cost for overseas acquisition, a company statement in Mumbai said on Friday.
Tata Steel had on 11 November launched an exchange offer of new foreign currency convertible bonds for the existing $875 million convertible alternative reference securities (CARS), due 2012.
"The company had launched this exchange offer to exchange part or all of the existing CARS for a fresh set of convertible bonds. This not only reduces the overall finance charges for the company, but also extends the maturity of the bonds by two years. In addition, the lower conversion premium makes the exchange bonds more equity-like, which is in line with the company's overall de-leveraging strategy," group chief financial officer Koushik Chatterjee said in a statement.
The CARS have a yield to maturity of 5.15 per cent per annum and are convertible into qualifying securities or ordinary shares of the company. Under the exchange offer, the company invited holders of the CARS to exchange any or all of their CARS for new convertible bonds due 2014.
The aggregate principal amount of CARS accepted by the company for exchange pursuant to the exchange offer was $493,000,000. This comprises $473,500,000 and $19,500,000 in aggregate principal amount of CARS accepted in the early offer and in the late offer respectively.
The aggregate principal amount of exchange bonds to be issued by the company in exchange for the CARS pursuant to the exchange offer is $546,935,000. This comprises $525,585,000 and $21,350,000 in aggregate principal amount of exchange bonds issued for CARS accepted in the early offer and in the late offer respectively, the company statement said.
About $382,000,000 of bonds remain still outstanding, it added.