Reliance's $1 billion bond issue subscribed over 4.5 times

Reliance Industries Limited (RIL) today announced the issue of $1-billion senior unsecured bonds bearing an interest rate of 4.125 per cent and maturing in 2025. The notes have been subscribed over 4.5 times across 272 accounts.

The bonds, issued under Rule 144A/Regulations of the US Securities Act of 1933, have been assigned a rating of BBB+ by rating agency S&P and Baa2 by Moody's, RIL said in a release..

The bonds, denominated in US dollar, have been priced at 240 basis points over the 10-year US Treasury Note, at of $98.998, to yield 4.249 per cent.

The notes will bear fixed interest of 4.125 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, the release said.

RIL proposes to use the funds for its ongoing capital expenditure.

In terms of geographic distribution, RIL said, 31 per cent of the buyers were from Asia, 25 per cent from Europe and 44 per cent from the United States.

The notes were distributed among high quality fixed income accounts, of which 62 per cent were fund managers, 7 per cent sovereign wealth funds, 18 per cent insurance companies and pension funds and 13 per cent banks and private banks, RIL stated.

According to RIL this is the first 10-year bond issuance in the oil and gas sector in Asia except Japan since July 2014. The issue also opened the market for private corporate sector in 2015.

''This transaction opened up the market for private sector corporate issuances out of Asia, against the backdrop of challenging market conditions. We successfully concluded a swift intra-day execution to capitalise on the market window and lock in long term funding at an attractive cost,'' V Srikanth, joint chief financial officer of RIL, commented.

RIL also claims to have achieved the lowest coupon ever by an Asian company outside Japan corporate issuer in the BBB category for a 10-year paper with a size of $1 billion or more.

It is also the largest private sector oil and gas deal out of Asia (excluding Japan) since the last RIL guaranteed-bond issue of 2012

Bank of America Merrill Lynch, Citigroup Global Markets Inc, The Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank acted as joint global coordinators of the bond issue.

Barclays Capital, Deutsche Bank, J.P. Morgan and Morgan Stanley acted as active joint book runners. ANZ, BNP Paribas, Crédit Agricole CIB and The Royal Bank of Scotland acted as passive book runners.