OVL inaugural dollar bond issue oversubscribed

Richa Mishra Updated - April 30, 2013 at 01:51 PM.

ONGC Videsh Ltd today said that its inaugural $800 million dual-tranche bond guranteed by the parent, ONGC, was over-subscribed.

In a statement issued here the company said, that the bond was over-subscribed with an order book aggregating close to $3 billion from high quality investor accounts.

OVL will apply the net proceeds to replace bridge financing obtained for acquisition of participating interests in upstream and midstream oil and gas assets in Azerbaijan, which was completed in March 2013. OVL had a bridge loan of $870 million to fund the acquisition.

OVL had floated the bond in two tranches: $300 million in 5-year tenor and $500 million in 10-year tenor.

In a statement issued here, OVL said that the transaction reported lowest ever coupon achieved by an Indian issuer in the five-year and 10-year tenor in the dollar bond market. OVL issued $500 million of 10-year notes on April 29 at 210 basis points over US Treasuries and $300 million of five-year debt at a premium of 190 basis points.

D.K. Sarraf, Managing Director of OVL, said, “While this was the largest Reg S issuance from India, the transaction was well executed to achieve the lowest pricing in the 5-year and 10-year tenor in the dollar bond market by an Indian issuer. High participation by real money investor demonstrates the superior quality of the order book and the confidence of global investors in the fundamentals of the company."

Reg S is a regulation by the US Securities and Exchange Commission to control US stocks sold outside the US.

After successfully completing investor roadshows across Singapore, Hong Kong and London, OVL decided to announce a dual-tranche transaction on April 29.

Citigroup, DB, RBS acted as joint book runners and lead managers.

Published on April 30, 2013 08:04