Reliance Industries raises $4 billion in India's biggest forex bond deal

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Reliance Industries has raised $4 billion in the largest ever foreign currency bond issuance from India. The bond issue was subscribed over three times.

Srikanth Venkatachari, Joint CFO of RIL, said in a statement that the mega issue was the largest debt capital market transaction for the company, and had “the tightest credit spreads across each of the long-dated tenors for any corporate in India.”

“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,” he added.

The conglomerate’s jumbo note issuance of US dollar bonds was done in three tranches – $1.5 billion for 10 years at 2.875 percent, $1.75 billion for 30 years at 3.625 percent and $750 million for 40-year term and 3.750 percent coupon rate.

The proceeds will mainly be used for refinancing existing borrowings. The notes have been priced competitively at 120 basis points, 160 basis points and 170 basis points over the respective US Treasuries benchmark. The issue has the lowest coupon achieved for benchmark 30-year and 40-year issuances and is the first ever 40-year tranche by a ‘BBB’ rated private sector corporate from Asia, excluding Japan.

RIL said that the notes received orders from over 200 accounts in Asia, Europe and the United States. “The notes were distributed to high quality fixed income accounts: 69 percent to fund managers, 24 percent to insurance companies, 5 percent to banks and 2 percent to public institutions,” the company said.

Rating agency Moody’s had rated the bond ‘Baa2’ while S&P Global Rating gave it ‘BBB+’; both had a ‘stable’ outlook on the bonds. The interest on the notes will be payable semi-annually in arrears, and the notes shall rank at par with all other unsecured and unsubordinated obligations of RIL.

BofA Securities, Citigroup and HSBC were the joint global coordinators to the issue. 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 SBI London Branch were the joint passive bookrunners.

Disclaimer: Moneycontrol and Firstpost are part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.

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Rachita Prasad

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