Tata Steel Ltd, the world?s fifth largest steel producer, is expected to raise Rs 750 crore through 7-year bonds, sources close to the deal said on Thursday. The bonds will offer a coupon of 9.90%, payable annually, and will have a put/call option at the end of the fifth year. Citibank NA is understood to be the sole arranger for the issue, the sources informed.
However, the issue?s opening and closing dates were not available. Moreover, Fitch Ratings have also assigned a national rating of ?AAA? to the company?s proposed non-convertible debenture issuance of up to Rs 750 crore, reflecting its position as a low-cost steel producer in India with significant iron ore and coal linkages.
Fitch also noted the company?s geographically diversified operations spread across Europe, India, and South East Asia with an established distribution network and successful refinancing of a substantial proportion of its bridge facilities.
Fitch, however, warned that the lack of raw material linkage at Tata Steel UK is a key concern, which needs to be addressed, in order to underpin stability in EBITDA margins.