Moody's Investors Service has assigned a “Baa3” rating to BPCL's proposed drawdown under its $2 billion medium-term note (MTN) programme.
Bharat Petroleum Corporation (BPCL) has raised $500 million through an offshore bond issue at 208 bps above the 10-year US treasury yield, said a bond arranger. The bonds come with a tenure of 10 years, he added.
“The bond issue attracted investments from over 170 investors spread across Asia, Europe and West Asia and the pricing was reduced by 17 bps compared with the initial price guidance,” said the bond arranger.
The initial price guidance was at 225 bps above the 10-year US treasury yield. Deutsche Bank, Citi Bank, HSBC and Standard Chartered were the bankers for the bond issue.
Moody’s Investors Service has assigned a “Baa3” rating to BPCL’s proposed drawdown under its $2 billion medium-term note (MTN) programme.
“The rating, which is in line with BPCL’s issuer rating of Baa3, combines its baseline credit assessment (BCA) of ba2 and a two-notch uplift under Moody’s joint-default analysis methodology for government-related issuers,” said Vikas Halan, Moody’s vice-president and senior credit officer, adding the uplift can be attributed to the strong support from the government, which has a 54.9% stake in BPCL.
“Further improvement in its credit metrics will continue to be constrained by our expectations of weak refining margins for the industry, as well as the company’s large planned capital expenditures,” Moody’s said.
This week, companies have managed to mop up $1.55 billion through offshore bond issues. On Tuesday, Bank of India raised $750 million through offshore bonds at a coupon rate of 3.125% while on Monday Reliance Communications had raised $300 million at a coupon rate of 6.5%. Both the issues had seen robust investor interest according to bond arrangers.
Offshore bond issues by Indian companies have crossed $5 billion in 2015. Bond market experts seem to be confident of achieving the $20 billion figure this year that would surpass the record amount of $18.6 billion raised last year.