Gold loan provider Muthoot Finance becomes the latest firm to tap the dollar bond market from India and is likely to have priced its dollar bonds having a tenor of 3.5 years on Thursday, sources aware of the matter told FE.
The initial price target on the bonds stood at 4.75% which was brought down to the final price target of 4.40%, a source said. Fitch Ratings has assigned Muthoot Finance’s US dollar-denominated senior secured notes an expected rating of ‘BB+(EXP)’. The notes will be issued under the firm’s $2-billion medium-term note programme. Prior to this, Muthoot Finance had hit the dollar bond market in October 2019 when it raised $450 million.
Abundant liquidity available across the globe, fresh allocations at the beginning of the year and a fall in the US treasury yields have helped Indian issuers rush to the overseas bond market where costs have come down. Indian firms and bank have raised a whopping $7 billion from the foreign currency (FCY) bond market in the first two months of 2020 itself, according to Bloomberg data.
Three entities — Exim Bank, a Bharti Airtel subsidiary and Adani Electricity Mumbai — raised a billion dollar each this year from the FCY bond market.
Other entities that hit the overseas bond market this year include Manappuram Finance, Shriram Transport, Future Retail, Power Finance Corporation, IRFC, among others.
FCY bond issuances had hit a record high in 2019, crossing the $21-billion-mark for the first time. The previous high was recorded in 2014 at around $18 billion.