Muthoot Finance to raise up to $2 billion from foreign markets to fund business growth

By: and |
Kochi, New Delhi | Updated: October 11, 2019 12:48:36 AM

Gold loan financier Muthoot Finance on Thursday said it proposes to raise $2 billion (around Rs 14,200 crore) from foreign markets to fund its business growth.

George Alexander Muthoot, managing directorGeorge Alexander Muthoot, managing director

Gold loan financier Muthoot Finance on Thursday said it proposes to raise $2 billion (around Rs 14,200 crore) from foreign markets to fund its business growth.

The board of the company approved establishment of a global medium-term note programme for raising up to $2 billion through issuance of foreign currency bonds or rupee-denominated bonds overseas on public/private basis in international markets subject to market conditions and regulatory approvals, Muthoot Finance said in a statement.

The establishment of the global medium-term programme is only an enabling step, and at present, no instruments are being issued by the company.

Appropriate intimations will be made to the stock exchanges as and when the company issues any instruments under the said programme, it said.

In another development, the company said it has been assigned long term rating of ‘BB+’ with a ‘stable’ outlook by Fitch Ratings.

Besides, S&P Global Ratings has assigned a long term rating of ‘BB’ with ‘stable’ outlook. Moody’s Investor Service has assigned ‘Ba2’ Corporate Family Rating with ‘stable’ outlook, it said in a release.

These ratings will enable Muthoot Finance to access international debt markets.

“The ratings take into account Muthoot Finance’s well-established franchise in the niche segment of gold-backed financing, its low credit losses and satisfactory leverage,” Fitch Ratings stated.

S&P Global Ratings said, “The ratings on Muthoot Finance are driven by the company’s very strong capital and earnings, with the risk-adjusted capital ratio at above 45%.

Moody’s Investor Service said the rating takes into account the company’s leading franchise and well-established track record in lending against the gold jewellery segment in India, and strong solvency metrics, including asset quality, capital and profitability.

George Alexander Muthoot, managing director, said, “This is another achievement by Muthoot Finance and it is a recognition of its leading and long track record in gold loan business. With this rating, we are expecting to access international debt markets, which will enable us to further expand our business and also diversify our borrowing mix.”

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