Listing in Singapore; $300 mn issue to be settled on Jan 13
KOCHI: Manappuram Finance has priced its $300 million three-year fixed rate euro medium term (EMT) notes at 5.9 per cent at its Financial Resources and Management Committee meeting held on Monday (January 6).
“The Financial Resources and Management Committee of the Board of Directors of Manappuram Finance Ltd at its meeting held on January 06, 2020 has approved the issuance of fixed rate senior unsecured notes aggregating to $300 million and has also approved the pricing, tenure and other terms of the notes,” a late night note on Monday sent to the stock markets said.
The issue, which is to be settled on January 13, 2020, will be listed on Singapore Exchange Securities Trading Ltd (SGX-ST).The coupon payment has been scheduled half yearly commencing from July 13, 2020.
Talking to businessbenchmark.news, a bond expert from Dubai said over the phone that the pricing for the issue is really good for the company, whose paper has received a rating of BB- from both international rating agencies, S&P and Fitch Ratings. “These are below investment grade ratings,” he reminded.
Muthoot Finance, the gold loan major headquartered in Kochi, raised $450 million more than two months ago from overseas market at a coupon of 6.125 per cent – as part of a $2 billion external commercial borrowing (ECB) programme.
Manappuram has said in its stock market filing that the proceeds of the notes will be used for onward lending and other activities. Though both Muthoot and Manappuram are said to be comfortable on their fund base, they seem to be busy diversifying their liability sources in the wake of the credit squeeze the market is currently grappling with.
Talking to analysts recently, VP Nandakumar, the MD and CEO of Manappuram had acknowledged that there is uncertainty on the liquidity front going forward though the current position doesn’t warrant any alarm.
Most of the financing for the established gold loan companies are sourced from banks, which have been happily parking funds with these companies. But the Kerala based banks are of late seen setting their eyes on gold loans that are less risky, and at the same time remunerative.
According to a report, CSB Bank, which has been in the news for its IPO and listing on stock markets, has built a gold loan portfolio as big as more than 30 per cent of its total loans.