Vedanta Resources announces pricing of $1-bn bond offering

Company to use part of the proceeds to repay existing indebtedness

Vedanta Resources plc has priced offering of bonds in the aggregate principal amount of $1 billion of 6.375 per cent bonds due 2022.

The London-listed company intends to use net proceeds from this offering to fund its offer to purchase for cash any and all of its outstanding $750 million 9.50 per cent bonds due 2018 and $1.2 billion 6.00 per cent bonds due 2019, it said in a release today. The company also plans to use part of the proceeds to repay its other existing indebtedness.

Vedanta has received and accepted for purchase about $370.87 million of the 2018 bonds and $425.03 million of the 2019 bonds. This excludes $227,000 of the 2018 bonds and $200,000 of the 2019 bonds that remain subject to the guaranteed delivery procedures.

With this transaction, Vedanta has proactively refinanced part of its 2018 and 2019 maturities and extended average debt maturity.

"This transaction is in line with our financial strategy to extend maturities, optimise the balance sheet, and create value for all stakeholders. We are pleased with the strong demand these bonds received, with support from all major markets," the release quoted chief executive officer Tom Albanese as saying.

This is the largest single-tranche G3 high yield bond issuance from Asia ex-Japan since 2015, informed the release.

The Bonds are being offered and sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933, and outside the United States under Regulation S under the Securities Act. The offering is expected to close on 30 January 2017, subject to customary closing conditions.

The Bonds are expected, on the closing date, to be rated "B3" by Moody's and "B+" by S&P. Vedanta intends to list the Bonds on the Singapore Exchange Securities Trading Limited, it said.