Issue oversubscribed 2.9 times attracting $1.6bn
KOCHI: Muthoot Finance Ltd, the largest gold loan company in India, has successfully priced a $550 million fixed rate senior secured note issuance for a tenor of 3.5 year tenor at 4.4 per cent – 172.5 basis points tighter compared with the first tranche of $450 million the company raised four months back.
The issue was oversubscribed 2.9 times attracting $1.6 billion from investors. MG George Muthoot (seen in the picture) , chairman of the company, stated that this is recognition of India’s NBFC sector and the fund raise will enable Muthoot in further diversifying and strengthening its sources of funding. “We look forward to strengthening our partnership with global investors,” he added.
The new tranche is part of the company’s $2billion medium-term note (MTN) programme launched a few months back. Company has issuer rating of 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,
Though the first tranche of $450 million was priced at 6.125 per cent, the notes are now traded at around the same level the current issue is priced.
“The proceeds of the issue will be used for permitted purposes including onward lending in accordance with RBI’s ECB Guidelines and other applicable laws,” a company statement added.
The transaction was officially launched on February 18, 2020, following which the company engaged several investors during a series of fixed income investor calls in Hong Kong, Singapore, London and US.
“On the back of high quality feedback, the transaction was launched with an initial pricing guidance of 4.75 per cent area on Thursday (Feb 20),” the company said.
Following a strong order book momentum supported by high quality real money investors, the company was able to tighten pricing by 35 basis points to 4.4 per cent. The final order book was in excess of $1.6 billion with oversubscription of more than 2.9 times.
The company said that the transaction witnessed 38 per cent participation from Asia, 13 per cent from Europe and 50 per cent from US; with 89 per cent investments from fund managers, 6 per cent from private banks, 3 per cent from insurance & banks and 2 per cent from others.
The bonds will be listed on International Securities Market of the London Stock Exchange. Deutsche Bank and Standard Chartered Bank acted as the Joint Global Coordinators and Joint Book Runners for the issue.