NBFC Muthoot Finance on Friday said it has successfully priced a $550-million bond for a 3.5-year tenor at 4.400%. The largest gold loan company had successfully placed $450 million for a 3-year tenor at 6.125% in October 2019.
The proceeds of the issue will be used for permitted purposes, including onward lending, in accordance with RBI’s ECB guidelines and other applicable laws, the company said in a communication.
MG George Muthoot, chairman of Muthoot Finance, said: “The response from international bond investors in our second issue is quite overwhelming. We are glad to know that global investors have understood our unique credit story, acknowledging our long track record in gold loan business. This fund raise will enable us in further diversifying and strengthening our sources of funding.”
The transaction was officially launched on February 18, 2020, following which the company engaged several investors during a series of fixed income investor calls in Hong Kong, Singapore, London and US. On the back of high quality feedback, the transaction was launched with an initial pricing guidance of 4.750% area on February 20. Following a strong order book momentum, supported by high quality real money investors, the company was able to tighten pricing by 35bps to 4.400%.
The final order book was in excess of $1.6 billion with over subscription of more than 2.9x. The bonds will be listed on International Securities Market of the London Stock Exchange.
The company has issuer rating of Long Term rating of ‘BB+’ with ‘stable’ outlook by Fitch Ratings, ‘BB’ with ‘stable’ outlook by S&P Global Ratings and ‘Ba2’ Corporate Family Rating with ‘stable’ outlook by Moody’s Investor Service.