RIL’s largest ever foreign currency bond issue from India oversubscribed 3 times; Reliance raises $4 bln in US

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India’s largest conglomerate said its $1.5 billion 10-year notes, $1.75 billion 30-year notes and $750 million 40-year notes were priced at 120 basis points, 160 basis points and 170 basis points over the respective U.S. Treasuries benchmark.

Reliance Industries Ltd announced Thursday its $4 billion bonds, the largest ever foreign currency bond issue from India, were oversubscribed nearly three times. RIL, India’s largest conglomerate, said its $1.5 billion 10-year notes, $1.75 billion 30-year notes and $750 million 40-year notes were priced at 120 basis points, 160 basis points and 170 basis points respectively over the respective US Treasuries benchmark. RIL said proceeds from the bond will be primarily used for refinancing of existing borrowings. The company will use part of the funds to refinance $1.5 billion worth of debt due to mature in February, according to a Reuters report, citing the term sheet.

RIL, in its announcement on the pricing, said it’s notes have been rated BBB+ by the rating agency S&P Global, and Baa2 by Moody’s. Moody’s analyst Sweta Patodia said: “RIL’s Baa2 ratings reflect the company’s large scale and dominant market position across its diverse businesses, its management’s strong execution track record and our expectation that its credit metrics will remain strongly positioned for its Baa2 rating, despite its planned investments in clean energy and other business segments.”

However, Reliance’s high dependence on the Indian economy through its digital services and retail businesses constrains its rating to one notch above that of the Indian sovereign rating, Patodia added.

“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,” Srikanth Venkatachari, Joint Chief Financial Officer of RIL said in the statement. “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,” he added.

The company said more than half of the bonds were distributed in Asia. While 14% and 33% of the notes were distributed in Europe and the United States respectively. It received orders from over 200 accounts around the globe. The record bond sale has eclipsed India’s previous record set by ONGC Videsh in 2014 when it raised $2.2 billion in US dollar bonds, Reuters reported.

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