Vedanta Resources launches overseas bond sale, eyes $1 billion
The bonds are expected to offer 9.375 per cent, about 440 basis points lower than it raised overseas money a few months ago.
The company garnered bids about $2 billion at the start of the deal with Asian markets working. The order book is likely to rise after Europe and US markets open.
“The pricing may be tighter at the close of the deal,” said an executive involved in the fund raising.
ET wrote on February 22 edition that the company would tap offshore bonds, which are rated in the non-investment grade category.
Moody’s Investor Services graded the issuance with Caa1, a rank lower in the high-yield category. JP Morgan is helping the company raise the funds.
“The rating confirmation reflects the reduced immediate refinancing risk following VLR’s fundraising and debt repayments, in particular at the holding company (holdco),” says Kaustubh Chaubal, a Moody’s Vice President and Senior Credit Officer. “We now expect the holdco’s cash sources will cover its debt maturities, interest and dividend payments through December 2021 as against our previous expectation of a funding shortfall in the quarter ending March 2021.”
Holdco VRL used the proceeds of a $1 billion USD bond issuance in December 2020 to repay debt, reducing its immediate refinancing needs. Still, the holdco has a sizable $3.3 billion of debt maturing from April 2021 through September 2022, along with annual interest payments of $660 million.
