Sources indicate this is likely to be the tightest ever pricing on a foreign currency high yield bond out of India. FE could not independently verify this claim.
GMR Hyderabad International Airport Limited (GHIAL) is believed to have priced its dollar bonds at 4.25% to raise $350 million in what is claimed to be the tightest ever pricing on a bond from a high yield issuer out of India, sources close to the deal told FE.
One investment banker even claimed this is likely to be the tightest pricing on a bond by a high yield corporate issuer out of Asia. FE could not independently verify these claims.
The ten-year bonds are believed to have received bids close to $2.4 billion from investors across the world according to latest information available till the time of going to press.
“The funds would be used for refinancing its existing loans and for capex as well,” a banker indicated. Roadshows for the 144A issue—in which US investors can also participate— had begun last Wednesday across New York, London, Hong Kong, Boston and Singapore.
Moody’s Investors Service has assigned a first-time corporate family rating of Ba1 to GHIAL. S&P Global Ratings has assigned its ‘BB+’ long-term corporate credit rating to the company.
Bank of America Merrill Lynch and HSBC were the joint global coordinators for the issue. These two banks along with Citi and JP Morgan were the joint book runners and joint lead managers as well.
Overseas investors have been bullish on foreign currency Indian bonds even as the supply from the country still remains miniscule compared to volumes out of other countries like China. However, issuances from India this year have hit $12.35 billion surpassing previous records.
GHIAL’s website indicates the company is promoted as a joint venture comprising the GMR Group (63%) in partnership with government of India (13%), government of Telangana (13%) and Malaysia Airports Holdings Berhad (11%).
The company’s financial statement points out that as on March 31, 2017 borrowings stood at Rs1,965.12 crore of which Rs421.15 crore is a foreign currency loan from banks, Rs1,228.92 crore account for Rupee term loans from banks and Rs315.05 crore accounts for loan from government of Telangana.
The firm had reported a 71.11% rise in its net profits at Rs107.80 crore for the first quarter of the current fiscal compared to the same period last year according to the company’s investor presentation. Gross revenues had also risen by 15.22% to Rs293.60 crore in the first quarter compared to last year.
Domestic passenger traffic grew by 23 percent to 3.3 million in the first quarter while international passenger traffic grew by give percent to 0.9 million. Total passenger traffic grew by 19% to 4.1 million. GHIAL has an annual passenger capacity of 12 million.
GMR group’s Delhi International Airport had tapped the dollar bond market last year to raise $522.60 million by issuing 10-year bonds at 6.125%.