News Hour- Reliance Industries' bond issue may show the way to many others

MUMBAI: Encouraged by the response from foreign funds to Reliance Industries' 10-year $1-billion dollar-denominated bond offering, investment bankers predict more Indian corporates and banks to build a pipeline of bond offerings in the months to come through their overseas subsidiaries. 

"Someone has to set a benchmark, the pipeline is strong for bond offering from Indian banks and corporates," a banker who was involved in the fund-raising said. 
RIL's $1-billion bond offering was the first corporate bond offering from India in 2012 and first since August 2011. Bankers say banks with overseas branches and Indian companies who have made foreign acquisitions would queue up for raising funds. 

The transaction priced through RIL's secondary curve, was nearly eight times over-subscribed with an order book aggregating $7.8 billion. 

V Srikanth, joint chief financial officer of Reliance, in a statement, said: "The transaction was well executed despite the short time-window and a volatile global environment." 

Bank of America Merrill Lynch, Barclays Capital,Citigroup Global Markets Inc, HSBC and UBS AG, Singapore Branch acted as joint book runners and lead managers. "The notes have been priced at 345 basis points over the 10-year US treasury note, at a price of Rs 99.481 to yield 5.468%, according to an emailed statement from the company. 

The notes will be denominated in US dollars, and will bear fixed interest of 5.400% per annum, with interest payable half yearly. Reliance Holding USA Inc will apply the net proceeds to fund its ongoing capital expenditure, to make business investments, to refinance its existing debt and for general corporate purposes," it said.
(Source- http://economictimes.indiatimes.com)