Overseas bond issuances by Indian corporates have crossed $17 billion in 2014 so far, compared with $14.4 billion in 2013, reports Shashidhar KJ in Mumbai. Last week Tata International, the global trading arm of the Tata Group, raised S$150 million through perpetual bonds and the strong appetite for Indian paper can be gauged from the fact that the issue was oversubscribed seven times, topping S$1 billion, investment bankers told FE.
The action is expected to continue, says Chetan Joshi, head, debt capital markets at HSBC, pointing out that both the base-rate US Treasury as well as spreads are contracting. A fall in credit default spreads (CDS) of Indian corporate bonds prompted many companies to tap the foreign bond market this year. Also in the market last week was Tata Motors, which picked up $750 million through 5½- and 10-year bonds at coupon rates of 4.625% and 5.75%. Even low-rated and unrated issues have found good response; in July, five companies raised funds through high-yield bonds. Tata Steel was the largest sub-investment grade issue and raised $1.5 billion through 5½- and 10-year bonds at a coupon rate of 4.5% and 5.9%, respectively.
By Shashidhar KJ