34 International Financing Review Asia November 25 2017INDIA
DEBT CAPITAL MARKETS
› REC TARGETS US$400M TRADERURAL ELECTRIFICATION CORP is targeting
US$400m from a potential offering of three-
year US dollar bonds at a maturity of three
years, with ANZ, Barclays, Mizuho and MUFG
as mandated as lead arrangers, according to
a market source.
REC is yet to announce the official size,
tenor and mandate, meaning the final
line-up may change.
On November 17, REC raised Rs6bn
(US$92m) from domestic rupee bonds of
three years and six months at 7.18%.
The rupee bonds have AAA ratings from
Crisil, India Ratings, Icra and Care.
In July, REC raised US$450m from 10-
year Green bonds at 3.875%.› ADANI ABBOT READIES OFFERINGADANI ABBOT POINT TERMINAL mandated Stifel,
Investec and Haitong International as joint lead
managers for meetings with fixed-incomeinvestors ahead a potential offering of US
dollar bonds.
The meetings in London, Hong Kong,
Singapore and the US began on November
20.
The dollar bonds, expected be rated BBB–/
BBB– (S&P/Fitch), will be issued under 144A/
Reg S format, subject to market conditions.› LODHA HIRES TRIO TO TAP 2020SLODHA DEVELOPERS INTERNATIONAL, rated B2/B
(Moody’s/Fitch), has hired three banks for
a proposed tap of its existing 12% Reg S US
dollar senior bonds due 2020.
JP Morgan, Citic CLSA Securities and UBS are
joint bookrunners and joint lead managers.
The Indian property group met fixed-
income investors and held calls in
Singapore, Hong Kong and London, starting
November 22.› PFC HIRES FOR GREEN DOLLARSPOWER FINANCE CORP has mandated Barclays, SBI
Caps and Standard Chartered for a potential
offering of Green dollar bonds of 10 years
under its US$1bn medium-term notes
programme.
The notes, with ratings of BBB–/BBB–/
Baa3 (S&P/Fitch/Moody’s), will be issuedin the Reg S format and listed on the
Singapore Stock Exchange.
The investor meetings in Asia and Europe
will commence from November 23.
The Indian issuer will use the proceeds to
finance power projects.› NHAI PLACES NOTES WITH EPFONATIONAL HIGHWAYS AUTHORITY OF INDIA has
placed with the Employees’Provident
Fund Organization Rs50bn of 15-year
rupee bonds at 7.64%, according to market
sources. The bonds come with a call option
at the end of year 10.
NHAI scrapped a Rs5bn offering of dual-
tranche bonds last Tuesday because it
received a lowest bid of 7.72% for a 15-year
tenor on the electronic bidding platform.
It was targeting a 10-year piece and a 15-
year portion, with a call option at the end
of year 10.
“NHAI was just checking rates for the
bonds on the EBP. It placed a huge tranche
of rupee bonds with EPFO because it got a
better rate,” said a market source.
In the first of week of November, NHAI
sold Rs8.5bn of five-year rupee notes at
7.11%.
Crisil, Icra, Care and India Ratings all see
the bonds as AAA.Reliance Industries sets tight benchmark
Bonds Indian blue chip gets good response after rating upgrade on sovereignRELIANCE INDUSTRIES priced the tightest 10-year
US dollar bonds from India’s corporate sector
on Monday, raising US$800m at just 130bp
over US Treasuries.
The 3.667% bonds were sold at par and
inside initial price guidance of 150bp area,
setting a record for Triple B rated corporate
issuers in Asia ex-Japan since the financial
crisis.
That was a marked improvement on
Reliance’s last 10-year issue in January 2015,
when it achieved a spread of 240bp to reflect
the tightening seen in credit markets since
then.
The refiner, possibly India’s most sought-
after corporate issuer, had not visited the
offshore market since 2015, giving the new
issue some rarity value.
Reliance Industries’ existing 2025 bonds
were seen at Treasuries plus 112bp, or a
G spread of 122bp. In the leads’ estimate
anywhere from 10bp to 19bp of extra
spread was needed to compensate for the
extra maturity to 10 years, but either way
the issuer was considered to have pricedinside its curve.
Given that Reliance Industries was already
rated above the sovereign at Baa2/BBB+
(Moody’s/S&P), Moody’s upgrade of India
last week had little impact on the trade or on
the company’s secondary curve, other than
providing some positive sentiment.
Moody’s on Friday raised the sovereign
rating to Baa2 from Baa3, lifting it above the
lowest rung of investment grade. S&P and
Fitch both rate India BBB–.
One of the leads estimated that Reliance
Industries’ bonds had tightened around
1bp-2bp after the surprise sovereign
upgrade, with public sector issuers
benefiting the most as they saw their note
tighten 5bp–12bp.
“The upgrade definitely helped with
sentiment and momentum, but this deal had
been planned for some time,” said a source
close to the issue.
Proceeds from the issue will be used to
redeem Reliance Industries’ US$800m
5.875% senior perpetual notes on their
February call date, which investors also sawas a positive as the company was not adding
to its leverage.
At the final pricing, orders exceeded
US$1.3bn from 90 accounts, with strong
interest from US accounts for the 144A/Reg
S trade. Asia bought 62% of the bonds, US
accounts took 25%, and European investors
booked 13%.
In terms of investor types, 57% were fund
managers, a combined 26% were insurers
and pension funds, 11% were banks and 6%
were public-sector buyers.
There was little trading seen in the paper
on Tuesday, as many of the bonds went to
high-quality accounts wanting to buy and
hold.
Bank of America Merrill Lynch, Citigroup
and HSBC were joint global coordinators, as
well as joint active bookrunners with Barclays,
JP Morgan and Standard Chartered.
ANZ, BNP Paribas, Credit Agricole,
Deutsche Bank, DBS, Mizuho, Morgan
Stanley, Scotiabank, Societe Generale and
SMBC Nikko were passive bookrunners.
DANIEL STANTON1019_07 Country02.indd 34 24/11/2017 21:55:22