COUNTRY REPORT INDIAINDIA
DEBT CAPITAL MARKETS
› TATA CAPITAL SETS YIELDS
TATA CAPITAL FINANCIAL SERVICES has set the
yields for a public issue of bonds to raise
up to Rs75bn (US$1.05bn), according to the
offer document.
It has fixed the yield at 8.7% for three years,
8.8% for five years and 9% for 10 years for
institutional and corporate investors.
The yield is fixed at 8.8%, 8.9% and 9.1%
for the same maturities for individual and
retail investors.
The three and five-year notes are secured
bonds. The 10-year notes are unsecured and
subordinated, eligible for Tier 2 capital.
The issue opens on September 10 and
closes on September 21.
Crisil has assigned a AAA/stable rating to
the notes.
AK Capital Services, Axis Bank and Edelweiss
Financial Services are the lead arrangers.
More non-banking financial companies
are tapping the public route to raise funds
since the Securities and Exchange Board
of India fast-tracked the issuance of retail
bonds, cutting the listing process from 12
to six working days.
In the past few weeks, KLM AXIVA FINAVEST,
TATA CAPITAL HOUSING FINANCE and INDIABULLS
COMMERCIAL CREDIT have filed draft shelf
prospectuses with Sebi to issue retail bonds.› AADHAR HOUSING PRICES RETAIL BONDSAADHAR HOUSING FINANCE has fixed the prices
for retail bonds to raise Rs5bn, with an
oversubscription option of up to Rs9bn,
according to a term-sheet.
The Indian housing finance company
has fixed the coupon at 9.6% for three
years, 9.65% for five years and 9.75% for 10
years, payable annually. It has also given
a monthly payment option for which the
coupons are fixed at 9.25% for five years
and 9.35% for 10 years.
Aadhar Housing has allocated 20% of
the issue to qualified institutional buyers,
10% to corporate investors and 35% each
to high-net-worth individuals and retail
investors.
The issue opens on September 14 and
closes on September 28.
Aadhar has appointed Yes Securities,
Edelweiss Financial Services, Yes Bank, Axis Bank
and AK Capital Services as the lead arrangers.
The bonds are rated AA+ (structured
obligation) by Care and Brickwork Ratings.› IDEA DIALS UP BONDS AT 10.9%IDEA CELLULAR raised Rs15bn from five-year
bonds at 10.9%, according to a filing on
National Securities Depository Limited.
The telecom operator was targeting
Rs15bn, plus a greenshoe option of Rs5bn.In case the bonds are downgraded to
BBB+, the coupon will be stepped up by
100bp. If the rating is downgraded below
BBB+, the majority of bondholders will
have an option to increase the coupon.
Axis Bank is the arranger of the deal.
Care has assigned an AA rating to the
notes.
In February last year, Idea raised Rs5bn
from five-year bonds at 8.03%.› IL&FS GETS SHAREHOLDER NOD FOR BONDSIL&FS TRANSPORTATION NETWORKS has received
shareholder approval to raise up to Rs35bn
from non-convertible debentures, according
to a filing on the BSE.
The approval comes after credit analysts
flagged a rising risk of default on the
company’s outstanding debt.
Icra on August 7 downgraded
outstanding debt instruments totalling
Rs75.7bn over concerns that liquidity
conditions will remain stretched. It said
the company faced sizable near-term debt
repayment obligations, high refinancing
risk and dependence on external funding to
support project special purpose vehicles.
The rating agency on August 16 moved
the rating to “issuer not cooperating”
saying it was unable to validate if the
company had been able to meet its debt
servicing obligations in a timely manner.
IL&FS Transportation declined to
comment on its fundraising plans and
financial position.Hindalco eyes US$2.3bn loan for Aleris buy
Loans Indian aluminium giant beefs up US presenceHINDALCO INDUSTRIES, a unit of Indian
conglomerate Aditya Birla Group, is in
discussions with lenders for a US$2.3bn
loan to finance its US subsidiary’s proposed
acquisition of aluminium processor Aleris.
The company had a meeting with
representatives from more than 20 banks in
late August.
The loan is split into a US$1.5bn 15-month
bridge facility and an US$800m six-year
term loan with a five-year average life.
Mumbai-listed Hindalco said in late July its
US unit NOVELIS will buy Aleris for US$2.6bn
in what is the group’s biggest acquisition
in more than a decade. Hindalco acquired
aluminium re-rolling company Novelis for
US$5.9bn in 2007.
The Aleris purchase will give Novelis a
foothold in supplying the aerospace industry,
a presence in the construction market inthe US and additional customers in the
car industry. It will increase the production
capacity of Novelis – one of the world’s
biggest suppliers of aluminium sheets for
beverage cans and car parts – by nearly a
quarter to 4.4 million tonnes.
Novelis has been a frequent borrower in
bond and loan markets. In September, it
closed a US$1bn five-year revolving credit
facility with 13 banks, according to Thomson
Reuters data. Bank of America Merrill Lynch,
Citigroup, Deutsche Bank, JP Morgan and
Wells Fargo were the leads on the facility,
which pays an interest margin of 150bp over
Libor. Other banks joining were ABN AMRO,
Bank of Montreal, HSBC, MUFG, Natixis,
Scotiabank, Siemens Financial Services and
Standard Chartered.
In April last year, Novelis tapped Asian
lenders for a US$1.8bn senior secured termloan that attracted eight banks in general
syndication. ANZ, Axis Bank, Bank of Baroda,
Barclays, Citigroup, ICICI Bank, ING Bank,
Kotak Mahindra Bank, MUFG, StanChart and
State Bank of India were the mandated lead
arrangers, bookrunners and underwriters.
The deal paid a top-level all-in pricing of
215bp based on a margin of 185bp and a five-
year average life.
Hindalco itself has not borrowed in the
international loan markets since October
2008 when it raised US$1bn through a
five-year amortising facility. That loan had
11 banks participating and paid a top-level
all-in of 315bp based on a blended margin of
280bp over Libor and an average life of 3.95
years. Proceeds refinanced a US$3.1bn 18-
month bridge loan Hindalco signed in August
2007 to fund its acquisition of Novelis.
PRAKASH CHAKRAVARTI