Tata Steel said it successfully raised $ 1.5 billion in international markets through the dual tranche Regulation S issuance of $ 1.5 billion unsecured bonds.
A statement from the company said the issue comprised $ 500 million 4.85 per cent unsecured bonds due on January 31, 2020 and $ 1 billion 5.95 per cent unsecured bonds due on July 31, 2024 by Tata Steel’s Singapore-based fully owned subsidiary Abja Investment Company. The issue is guaranteed by Tata Steel.
Rated BB+ by Fitch and BB by S&P, the bonds will be listed on the Frankfurt Stock Exchange.
Simultaneous road shows were organized in Hong Kong, Singapore and London and the transaction was launched on July 24. It had a peak order book of $ 11 billion across tranches by the time the books closed at the end of the day and this enabled the issue to be priced about 50 basis points tighter than the initial price thoughts on both the tranches, the company said.
The deal was distributed 59 per cent into Asia and 41 per cent into Europe, the Middle East and Africa (EMEA) and others to several long term buy-and-hold institutional investors, banks and private banks.
"This is Tata Steel’s debut US Dollar bond issuance and forms part of the company’s long term financing strategy to raise capital internationally," Koushik Chatterjee, Group Executive Director (Finance & Corporate), Tata Steel, said in a statement.
He said the proceeds of the fund-raising will be deployed as per the strategic plan of the company including off shore investment.
"The successful bond issue enables the company to diversify the investor base, lengthen maturity profile and optimize the financing and capital structure," he said.
