Indian steel-making company, Tata Steel on Friday announced that it has raised USD 1.3 billion by issuance of unsecured bonds in the international markets.
The issue comprises USD 300 million 4.45 percent unsecured bonds due on July 24, 2023 and USD one billion 5.45 percent unsecured bonds due on January 24, 2028 by Abja Investment Co Pte Ltd, (the issuer), a wholly owned subsidiary of Tata Steel incorporated in Singapore, the company said in a release.
Further, the bonds are rated BB- by S&P and will be listed on the Singapore Exchange.
"Based on the buoyant trading performance of the existing bonds and strong credit appetite from quality investors, the company launched an innovative bond structure. The success of the issue demonstrates the investor's confidence in the long term strategy of the company and we are very happy with the quality of the investors in the issue," said ED and CFO Tata Steel, Koushik Chatterjee.
"The proceeds of the bonds will be used to refinance the offshore obligations of the group, which will help de-risk the balance sheet, enhance financial flexibility, diversify the investor base and improve the overall debt maturity profile. The completion of the refinancing also marks an important step forward to create a sustainable financial structure in preparation of the proposed joint venture in Europe," Chatterjee added.
Road shows were organized simultaneously in Dubai, Singapore, London and Hong Kong and on the back of overwhelming investor response.
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By the time Tata Steel closed its books at the end of the day, the peak order book was in excess of USD seven billion across tranches.
The tremendous response enabled the issue to be priced about 42 bps tighter than the initial price thoughts on both the tranches.
The deal was distributed to a wide number of long term buy-and-hold institutional investors, banks and private banks across regions.