INDIA
DEBT CAPITAL MARKETS
› IRFC SENDS RFP FOR DOLLAR ISSUE
INDIAN RAILWAYS FINANCE CORP has sent requests
for proposals to banks for a potential
offering of US dollar bonds to raise
US$300m, according to market sources.
IRFC is looking at a 10-year maturity for a
Reg S issue, one source has said.
The firm has been interested in issuing
Masala or offshore rupee bonds for the
longest time, but has not been happy with
pricing, a second source has said.
Recently, IRFC raised Rs9.35bn from 10-
year rupee bonds at 7.54%.
Locally, the bonds have AAA ratings from
Crisil, Icra and Care.
IRFC has yet to announce officially the
size and tenor of the issue.
› REC RAISES RS28.5BN AT 6.99%
RURAL ELECTRIFICATION CORP has priced three-
year two-month rupee bonds at 6.99% to
raise Rs28.5bn (US$439m), according to a
market source.
The final price was fixed following
bidding on the National Stock Exchange’s
electronic platform on October 30.
The pay-in took place last Tuesday.
In September, REC sold Rs11.5bn of 18-
month rupee bonds at 6.75%.› ADANI PORTS SELLS 10-YEAR BONDSADANI PORTS AND SPECIAL ECONOMIC ZONE has
raised Rs16bn from 10-year rupee bonds
at 7.65%, according to data on National
Securities and Depository.
Life Insurance Corp of India is rumoured
to have subscribed to the bonds.
The rupee notes have a AA+ Icra rating.› IGT EYES FIRST INVIT ISSUEINDIA GRID TRUST, a domestic infrastructure
investment trust (InvIT), is talking to
bankers about raising up to Rs15bn from
10-year amortising rupee bonds, according
to market sources.
This will be the first rupee bond from
an InvIT after the Securities and Exchange
Board of India in August authorised
infrastructure and real-estate investmenttrusts to sell bonds. Until then, InvITs and
other trusts could only borrow through
loans.
The debt raised has to be within the overall
49% gearing limit of an InvIT/REIT and any
debt issuance above 25% of the asset value
needs the approval of unitholders.
Although the use of proceeds is not
known yet, India Grid Trust plans to
acquire four transmission assets in the
financial year to March 31.
India Grid Trust is yet to make an official
announcement on the final size and tenor
of the offering.› NHAI PRICES FIVE-YEAR AT 7.11%NATIONAL HIGHWAYS AUTHORITY OF INDIA has priced
five-year rupee bonds at 7.11% to raise
Rs8.5bn, according to market sources.
The final price was fixed after investors
placed bids on the BSE’s electronic bidding
platform on Thursday.
In August, NHAI raised Rs50bn from 15-
year rupee bonds at 7.38%.
Crisil, Icra, Care and India Ratings have
all rated the bonds AAA.
NHAI has yet to make an official
announcement on the final price and size
of the issue.RCom debt scheme fails to stop slide
Bonds Telecom company sees dollar notes continue to fall, despite repayment agreement with domestic lendersRELIANCE COMMUNICATION dollar bonds have
continued to slide even after the company
agreed to a new debt-repayment plan with
domestic lenders.
The plan includes a pledge to raise up to
Rs170bn from the sale of assets like mobile
towers, according to a Reuters report.
On October 27, the cash price of RCom’s
US$300m 2020 dollar bonds dropped to
39.45 from 42.00, equivalent to a 44.494%
yield.
Fitch Ratings in a note said, “We rate
Rcom’s US$300m senior secured bonds due
in 2020 at ‘C’ with Recovery Rating of ‘RR4’.”
The ratings on RCom will be unaffected by
the debt restructuring plan.
Billionaire Anil Ambani’s telecom company
said it would repay lenders an additional
Rs100bn through the sale and commercial
development of its real estate near Mumbai
and in eight other cities.
The announcement comes after the
unravelling of RCom’s previous debt-
repayment plan, which had hinged on
merging its mobile operations with those
of rival Aircel and selling a 51% stake in its
tower arm to Canada’s Brookfield.However, the Aircel merger was called
off on October 1 over what RCom called
regulatory delays and legal uncertainties,
forcing it to renegotiate a plan to sell its
tower unit to Brookfield for Rs110bn as the
assets had to be revalued.
RCom executives on Monday last week said
talks with Brookfield were still ongoing, with the
Canadian company open to buying the entire
tower mobile business, though they noted that
there were other suitors, as well.
RCom executive director Punit Garg said
the lenders had agreed to the new debt-
repayment plan, which would spare creditors
any write-offs. The deals will be completed
before the end of March.
“The lenders were very, very comfortable
looking at the conservative management
estimate of monetising these assets [worth
Rs170bn],” Garg told reporters.
“What we have presented [to the lenders]
is a zero write-off plan. They were so happy
and thrilled.”
There was no immediate comment from
the State Bank of India-led lenders.
Monday’s plan also involves lenders
swapping about Rs70bn rupees worth ofdebt for a 51% stake in the company. RCom
will retain about Rs60bn rupees in debt after
the repayment plans go through.
Once the lenders take more than a 51%
stake in Rcom, the change of control clause
in the bond documents will be triggered
and bondholders can accelerate the bond
repayment, said Fitch in a note.
RCom, with Rs443bn (US$6.8bn) of net
debt as of March is the most leveraged
among listed Indian telecom companies.
The debt load has spooked investors,
sending RCom’s shares and dollar bonds
tumbling this year amid worries over whether
or not it could pay back creditors at a time
when profits across the telecom sector are
slumping due to stiff competition stemming
from the entry of start-up Jio, which Anil
Ambani’s older brother, Mukesh Ambani,
leads.
Jio, part of RELIANCE INDUSTRIES, was also
among potential suitors for some of RCom’s
assets, Garg said, without elaborating.
RCom is in the process of scaling down its
wireless business in India and plans to focus
on catering to corporate customers.
PROMIT MUKHERJEE, DEVIDUTTA TRIPATHY