Close on the heels of a $250-million syndicated loan, National Thermal Power Corporation (NTPC) is looking to issue dollar bonds, according to Arup Roy Choudhary, chairman & managing director.
Last month, NTPC raised $250 million through a syndicated term loan from Japan’s Mizuho Bank. The term loan has a maturity of seven years and was priced at a floating interest rate over the Libor. Should NTPC’s offshore bond issuance go through, it would take the tally of such issuances this year to $15 billion.
NTPC said in an email that it will shortly appoint bankers to the issue, to raise bonds of a benchmark size, with a tenure of 10 years. In 2012, NTPC had raised $500 million at 305 basis points above the benchmark US Treasury. ?The proceeds will be used to finance capital expenditure for current and new power projects, renovation and modernisation schemes,? NTPC added in the email. Bloomberg reported on Wednesday that metal and mining company Sesa Sterlite is looking to raise $500 million through dollar convertible debt.
Sesa Sterlite has $217-million outstanding convertible debt due by October 31, according to data compiled by Bloomberg; in 2009, it had issued $500million of 5% notes exchangeable into equity.
Bankers expect a number of non-finance players to tap the overseas bond markets. Shankar Subramaniam, director, financial institutions group, Bank of America, expects offshore bonds to hit $18 billion by the end of the year.
So far, Indian firms have raised about $14.3 billion via foreign bonds. ?Even companies below investment grade have been seeing demand and their issues have been oversubscribed. After the quarterly results, you will also see a number of banks coming back to the market,? Subramaniam added.
ONGC Videsh raised $2.23 billion through its issue of dual-currency foreign bonds, the largest offshore issue so far this year. ONGC raised money through three equal tranches of five-year US dollar bond, 10-year US dollar bond and seven-year euro bond.
The five-year US dollar bond was priced at 160 bps over benchmark US treasury, while the 10-year US dollar bond was priced at 207.5 bps above the benchmark. ONGC last raised such bonds in April 2013, and the five-year bonds were priced at 190 bps over treasury and the 10-year bonds at 210 bps over the US treasury.
