Reliance Industries raises $1 bn via foreign bond sales

23 Jan 2015

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Reliance Industries Ltd (RIL), India's largest company by revenues, has raised $1 billion through bond sales to investors across Asia, Europe and the US, the company said in a statement on Thursday.

The funds will be used for the company's ongoing capital expenditure, RIL said.

''The notes were over 4.5 times oversubscribed across 272 accounts. In terms of geographical distribution, the notes were distributed 31 per cent in Asia, 25 per cent in Europe and 44 per cent in the United States,'' said the company, adding that investors ranging from fixed income funds to sovereign funds had participated in the issue.

The bonds were priced at 240 basis points over the 10-year US treasury bonds at a yield of 4.12 per cent.

The latest issue was at a cheaper rate than when it raised $1.5 billion in September 2012 at an interest rate of 5.4 per cent.

Ten-year US treasury is trading at 1.89 per cent, near one-and-a-half year lows.

 Bank of America Merrill Lynch, Citigroup Global Markets Inc, HSBC and Standard Chartered Bank Plc were joint global coordinators for the issue.

This was the lowest coupon ever achieved by an non-Japanese Asian company in the BBB category for a 10-year, $1 billion or more issue, said Ananth Narayan, head financial markets, South Asia at Standard Chartered.

''Given the challenging global market conditions for commodities and some emerging market papers, this is creditable,'' Narayan said. ''The bonds are now quoting at a premium reflective of the confidence in the paper.''

RIL's aim was to conclude a swift intra-day execution ''to capitalize on the market window and lock in long term funding at an attractive cost'', said V Srikanth, the company's joint chief financial officer.

''We are happy to see participation from repeat investors being supplemented by new high-quality investors including central banks and real money accounts,'' he said.

 

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