RIL raising $500 mn in perpetual bonds overseas

Reliance Industries today launched an issue in Hong Kong and Singapore markets to raise a minimum of $500 million (around Rs2,700 crore) in perpetual bonds, taking the overall long-term debt the company raised overseas in the current financial year to $4 billion.

This is the fifth time that the Mukesh Ambani-led company, which is sitting on over Rs75,000 crore surplus cash, is raising long-term debt so far this fiscal.

Standard & Poor's Ratings Services has assigned a 'BBB+' long-term issue rating to the proposed US-dollar-denominated senior unsecured perpetual notes by Reliance Industries Ltd.

The notes will rank equally with all the company's other present and future unsecured and unsubordinated obligations, the ratings agency said, adding that the rating is subject to review of the final issuance documentation.

Perpetual bonds have no maturity date and, therefore, may be treated as equity, not as debt. Perpetual bonds pay coupons forever and the issuer does not have to redeem them. Their cash flows are, therefore, perpetual.

Reliance intends to use the proceeds to fund its ongoing capital expenditure in the exploration and refining sector in India.