Reliance has raised $4 billion in debt through its largest-ever foreign-currency bond issue
New Delhi:
Reliance Industries Limited (RIL) on Thursday said it has raised $4 billion in debt (roughly Rs 30,000) through the largest-ever foreign-currency bond issue by an Indian legal entity. .
The oil and gas telecommunications group plans to use the proceeds from the three issuances to unload existing loans.
The company said in a statement that it was “nearly three times oversubscribed with a peak order total of approximately $11.5 billion.”
This is the largest foreign currency bond transaction ever in India, surpassing the US$2.2 billion bond issue of ONGC Videsh Limited in 2014.
Reliance has raised $1.5 billion in a 10-year issue with a 2.875% interest rate, $1.75 billion in a 30-year contract with an interest rate of 3.625% and $750 million in a 40-year issue with interest 3.75% rate.
This is the first time that any BBB-rated Asian company outside of Japan has issued a 40-year dollar bond.
The 10-year, 30-year, and 40-year bonds are repaid between 2032 and 2062.
Reliance plans to use the proceeds to clear some of its existing debt, including a $1.5 billion loan due to be paid in February.
The company said the bonds carry coupons (interest rates) linked to US treasuries. 10-year bonds will have a coupon rate of 1.2 percentage points higher than 10-year US Treasuries, 30-year bonds will have 160 basis points higher than US government bonds and the 40-year bond would have 170 basis points, respectively. points against the corresponding US Treasury note.
This represents “the tightest implied credit spread ever” on the US Treasury notes of an Indian company, it said.
Notes is rated BBB by S&P and Baa2 by Moody’s.
Reliance says 53% of the money raised comes from Asia, 14% from Europe and 33% in the US.
In terms of investor profiles, 69% go to fund managers, 24% to insurance companies, 5% to banks and 2% to public institutions.
“This transaction is significant in many ways – (it’s) the largest foreign-currency bond issue ever from India, the tightest implied credit ever To date spread throughout the US Treasury Department on each of the 3 tranches respectively by an Indian Company, the lowest coupon achieved for benchmarking 30 Year and 40 Year Issues by a private sector BBB company from Asia outside Japan and the first 40-year issuance of a BBB private sector company from Asia outside Japan,” the statement said.
Reliance is a net debt-free company with a cash balance of Rs 2.59 lakh crore, exceeding its total debt of Rs 2.55 lakh crore as of September 30, 2021.
Moody’s Investors Service said earlier this week the company’s cash on hand, along with expected cash inflows from operations, would be sufficient to cover cash flows for capital expenditures and liabilities that come due in the near future. next 18 months.
In November 2021, it received around Rs 26,600 crore proceeds from its last call on its rights issue, which further increased its liquidity.
