Muthoot Finance’s 3-year bond issue raises $450 mn

Pricing at 6.125 pc; Issue oversubscribed 2.5 times

KOCHI: Muthoot Finance Ltd, the largest gold loan company in India, has successfully priced a $450 million (appr Rs3190 cr) fixed rate senior secured issuance in 144A / Reg S format for a 3 year tenor at 6.125 per cent.

The final order book was in excess of $1.2 billion with oversubscription of more than 2.5 times

This bond transaction marks the first international bond by an NBFC in 144A / Reg S market, allowing it to tap the US investor base in addition to Asia and Europe.

The proceeds will be used for permitted purposes including onward lending in accordance with RBI’s external commercial borrowings (ECB) Guidelines and other applicable laws.

The company had engaged with investors during an extensive deal road-show across Singapore, Hong Kong, London and the United States. Backed by strong investor feedback, the transaction was launched with an initial price guidance of 6.375 per cent area. Following a strong order book momentum supported by high quality real money investors, the company was able to tighten pricing by 25bps to 6.125 per cent.

The transaction witnessed 37 per cent participation from Asia, 28 per cent from Europe & Middle East and 35 per cent from US with 88 per cent investments from asset managers, 6 per cent from Insurance & Pension Funds and 6 per cent from others.

The bonds will be listed on International Securities Market (ISM) of the London Stock Exchange (LSE). Earlier this month, company had obtained issuer rating Long Term rating of ‘BB+’ with ‘Stable’ Outlook by Fitch Ratings, ‘BB’ with ‘Stable’ Outlook by S&P Global Ratings and ‘Ba2’ Corporate Family Rating with ‘Stable’ Outlook by Moody’s Investor Service.

Deutsche Bank and Standard Chartered Bank acted as the Joint Global Coordinators and Joint Book Runners for the issue. MG George Muthoot (seen in the picture), chairman of Muthoot Finance, on this inaugural issue stated, “The response from international bond investors to our debut international bond issue once again reiterates the robustness and long track record of our gold loan business, and is recognition of India’s retail credit story.”

Muthoot Finance, which employs 24,644 persons, has a branch network of 4,502 branches across 23 states, the national capital territory of Delhi and five union territories in India. The company’s loan assets stood at Rs34246 crore as of March 31, 2019 and has generated profit after tax (PAT) of Rs1972crore for FY 2019.


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