#Breaking | Reliance Ind raises $4 bn in US Dollar Bonds in three tranches▶️This is the largest-ever foreign currency bond issuance from India Reliance Ind▶️$ notes were nearly 3x oversubscribed with orderbook aggregating $11.5 bn pic.twitter.com/5XQIUM6cmt— CNBC-TV18 (@CNBCTV18Live) January 6, 2022
Reliance Industries Ltd (RIL) on Thursday said it has raised $4 billion in a three-tranche US dollar bond issuance in what is the largest-ever foreign currency bond issuance from India. The bond issue was subscribed over three times with orders mainly from Asia and the US.
The billionaire Mukesh-Ambani-led oil-retail-telecom conglomerate informed exchanges in a filing that it has raised $1.5 billion in a 10-year tranche, $1.75 billion in a 30-year and $750 million in a 40-year deal. The proceeds will mainly be used for refinancing existing borrowings.
"The Notes are rated BBB+ by S&P and Baa2 by Moody's. The Notes were nearly 3 times oversubscribed with a peak orderbook aggregating ~US$11.5 billion and were priced through RIL’s secondary curve. The Notes have been priced at 120 basis points, 160 basis points and 170 basis points over the respective US Treasuries benchmark," the RIL statement read.
Speaking on the bond issuance, RIL Joint CFO Srikanth Venkatachari said, “We are extremely pleased with the strong outcome on our multi-tranche long dated USD bond issuance, having issued not only the largest debt capital market transaction at US$4 billion but also the tightest credit spreads across each of the long-dated tenors for any corporate in India."
He further said, “The support received from the marquee international capital market investors is reflective of the strength of our underlying businesses with established growth platforms across energy, consumer and technology as well as robustness of our balance sheet. This issue continues the tradition of Reliance being a sophisticated and innovative issuer across the capital structure.”
Experts called the RIL bond issuance positive. Kotak Mahindra AMC's Laxmi Iyer said, "It is a mammoth issuance. Given the tenure, the kind of appetite and the spreads, it is an amazing raise from an issuer standpoint.”
Market expert Prakash Diwan said, "This is a very smart treasury operation that the company has undertaken. After having become net debt free, now they are probably becoming net debt efficient. This subscription is likely to help refinance the earlier debt which could probably be higher cost than this. So this kind of gives you visibility for the next 10, 30, 40 years for some of these tranches which means the cost of funds remains benign and visibly low for the longer period of time.”
BoFA Securities, Citigroup, and HSBC acted as Joint Global Coordinators. BofA Securities, Citigroup, HSBC, Barclays, JP Morgan and MUFG acted as Joint Active Bookrunners. ANZ, BNP PARIBAS, Crédit Agricole CIB, DBS Bank Ltd., Mizuho Securities, SMBC Nikko, Standard Chartered Bank and State Bank of India, London Branch acted as Joint Passive Bookrunners.
Meanwhile, RIL share price quoted at Rs 2,419.55 apiece on NSE, down a little over 2 percent in a weak market at 1.10 pm. The broader Nifty50 was down 1.21 percent, trading at 17,707.
Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.