Reliance Holding US' 10-year bond issue received bids nearly eight times the issue size of $1 billion. The order book for the guaranteed senior notes, which will be fully and unconditionally guaranteed by Reliance Industries, aggregated $7.8 billion. But this issue does not have a green-shoe option.

The bond issue has been priced at 345 basis points over the 10-year US Treasury Note, at a yield of 5.468 per cent. The bonds will be denominated in US dollars, and will bear fixed interest rate of 5.4 per cent per annum, with interest payable semi-annually in arrears.

Reliance Holding USA will utilise the proceeds to fund its ongoing capital expenditure, to make business investments, to refinance its existing debt and for general corporate purposes, a company press release said.

In terms of geographic distribution, Asia bids accounted for 31 per cent, Europe 17 per cent and the US 52 per cent. The break-up of the investor segment was: fund managers (65 per cent), insurance funds (15 per cent), banks (10 per cent), private banks and government agencies (5 per cent each).

Bank of America Merrill Lynch, Barclays Capital, Citigroup Global Markets Inc, The Hongkong and Shanghai Banking Corporation Ltd and UBS AG, Singapore Branch acted as joint book-runners and lead managers.

The notes are rated Baa2 by Moody's and BBB by S&P. According to Mr Rajiv Nayar, Managing Director and Head of Capital Markets Origination, Citi India, the Reliance bond has been priced at a very attractive level. The pricing of the Reliance bond is primarily attributed to Reliance's strong credit and lineage, right timing, market momentum and the highest quality order book.

“The international bond markets are favourable and present a compelling opportunity to Indian issuers to lock in long tenor funding at very attractive all-in costs while at the same time diversifying their investor base,'' Mr Nayar said.

RIL shares closed at Rs 843.75, down 1.18 per cent, on the NSE.

priyan@thehindu.co.in

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