Reliance Industries Limited
on Thursday said it has raised $4 billion (around ₹ 30,000 crore) in
debt through the largest ever foreign currency bond issuance by an Indian
entity. The oil-to-telecom conglomerate
plans to use the proceeds of the three tranche issues to retire existing
borrowings. The issue was "nearly 3 times over subscribed with a peak order
book aggregating around USD 11. 5 billion," the company said in a
statement. This is the largest ever foreign currency bond transaction in India,
eclipsing ONGC Videsh Limited's $2. 2 billion US dollar bonds issue of 2014.
Reliance raised $1. 5 billion in a 10-year issue at a coupon or interest rate
of 2. 875 per cent, $1. 75 billion in a 30-year deal at a 3. 625 per cent rate and $750 million in a 40-year issue at a
3. 75 per cent coupon rate. This is the first time any BBB-rated Asian company
outside of Japan has issued a 40-year dollar bond. The bonds in 10-year,
30-year and 40-year maturities are due to repayment between 2032 and 2062.
Reliance plans to use the proceeds to retire the existing debt,
including a $1. 5 billion loan that is due to mature in February. The company
said the bonds carry coupons (interest rate) linked to US treasuries. The 10-year notes will carry a coupon rate
that is 1. 2 percentage points above the 10-year US treasury note, the 30-year
bond will offer 160 basis points over the corresponding US government bond and
the 40-year note will give 170 basis points over the respective US Treasury
note. Industries Raises $4 Billion In India's Biggest Forex
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, it said, represents the "tightest ever implied credit
spread" over US Treasury notes by an Indian company. The Notes are rated
BBB by S&P and Baa2 by Moody's. Stating that with this, it has joined a
select group of issuers from Asia to have made jumbo bond , Reliance
said 53 per cent of the money was raised from Asia, 14 per cent from Europe and
33 per cent in the United States. In terms of investor
profile, 69 per cent went to fund managers, 24 per cent to insurance companies,
5 per cent to banks and 2 per cent to public institutions. "This
transaction is significant on various counts - (it is) the largest-ever foreign
currency bond issuance from India, ever implied credit spread over the
respective US Treasury across each of the 3 tranches by an Indian Corporate,
coupon achieved for benchmark 30-year and 40-year by a private
sector BBB corporate from Asia ex-Japan, and first-ever 40-year tranche by a
BBB private sector corporate from Asia ex-Japan," the statement said.
Reliance is a net-zero debt firm with its cash balance of ₹ 2. 59 lakh crore,
exceeding its gross debt of ₹ 2. 55 lakh crore as of 30, . Its existing
cash, along with expected cash flows from operations, will be sufficient to
cover its cash outflows for capital spending and debt maturities in the next 18
months, Moody's Investors Service had said earlier this week.
November 2021, it received around ₹ 26,600 crore in proceeds from the final
call on its rights issue, which further enhanced its liquidity.
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