Tata Communications, an arm of the Tata Group, today launched a benchmark (SGD 500 million or more; about Rs 2,200 crore) issue in the Singapore market, providing a further boost to domestic corporates raising funds
overseas, according to merchant banking sources.
"The benchmark issue from Tata Communications Netherlands, which is a subsidiary of Tata Communications, denominated in Singapore dollars, has an initial pricing guidance of 4.250-4.375 per cent. The bond sale has a maturity of three years," a merchant banking source said.
Tata Communications could not be immediately reached for comments.
The REG S (Regulation S) bond issue carries a guarantee from parent Tata Communications, which is into international voice and data transfer. Tata Communications was formerly the state-run VSNL, which the Tatas bought through a divestment programme in early 2000.
Regulation S bonds are a "safe harbor" as they are executed in another country and will not be subject to the registration requirement. These bonds carry two safe harbour provisions--an issuer safe harbour and a resale safe harbour.
The new year has seen many domestic companies and financial institutions such as the Exim Bank and ICICI Bank raising debt.
On January 7, the Exim Bank raised USD 750 million in a European bond sale at the cheaper ever rate of 4 per cent for a 10-year money, which got an over-subscription of 8.5 times the issue size.
Within a week, state-run distribution utility PowerGird raised USD 500 million at 3.87 per cent for a 10-year USD issue which got an over-subscription of 19 times.
In the same week, the largest private lender ICICI Bank mopped USD 225 million from a seven-year Singapore bond sale programme on January 10.