RIL subsidiary raises $1.5 bn in US bond sale

India’s largest private sector company, Reliance Industries’ (RIL’s) wholly-owned subsidiary, Reliance Holdings, has raised $1.5 billion (Rs 6,600 crore) through a bond sale in the US. The company, in a statement, said it was the company’s first dollar-denominated issue after 1997.

A $1-billion, 10-year tranche of the issue was priced 205 basis points over US Treasuries, while a $500-million, 30-year bond was priced at 240 basis points above Treasuries. The transaction was nearly 7.8 times subscribed, with total order book size on the two-part issue at $11.6 billion, RIL said.

The proceeds are guaranteed by RIL and will be used to finance its three shale gas acquisitions in the US that the company made this year. The proceeds will also be used to refinance existing debt, business investments and general corporate purposes.

Since April this year, RIL completed three shale gas deals in the US. It acquired 40 per cent interest in Atlas Energy’s Marcellus gas acreage (120,000 net acres) for $1.07 billion in southwestern Pennsylvania. In July, it entered into a $1.35-billion joint venture in Eagle Ford with Pioneer Natural Resources and its partner, Newpek, under which it got a 45 per cent stake in 212,000 net acres. The third shale gas deal was announced in August, where RIL entered into a 60:40 joint venture with Carrizo Oil and Gas in the Marcellus Shale for $392 million.

Bank of America Securities LLC, Citigroup Global Markets Inc, HSBC and The Royal Bank of Scotland plc acted as joint book runners and lead managers.