Adani Green Energy offers dollar bond again after earlier deal postponed

By Finbarr Flynn 

Billionaire Gautam Adani’s conglomerate kicked off a dollar bond sale Wednesday after postponing an offering last month when some investors pushed back on pricing.   

Units of the group’s clean-energy business, Adani Green Energy Ltd. are marketing a 20-year $600 million note at a yield of around 7.75 per cent, according to a person familiar with the matter who asked not to be identified. That compares with initial guidance of around 7 per cent for the October deal. 

 

Adani is returning to the market after credit spreads on Asian dollar bonds tightened to a record low after Donald Trump’s election victory boosted global risk appetite and fueled offerings in the primary market. The conglomerate plans to use the proceeds to repay foreign-currency loans, according to the person. 

The increase in US yields since Trump’s election victory may result in higher all-in borrowing costs for Adani than if it had proceeded with its October offering.

 

Spreads on Asian bonds with the lowest investment-grade ratings — similar to those on Adani’s planned sale — have tightened 10 basis points since mid-October, but 10-year Treasury yields have climbed by about 36 basis points in the same period, according to data compiled by Bloomberg.

 

The Adani Group in October had reached what’s called “final price guidance” on its offering of 20-year bonds, with the security set to yield 7 per cent, but it decided to delay the sale.

 

The media-to-mining group has been refocusing on growth opportunities as it seeks to rebuild investor confidence following a short-seller report in 2023 by Hindenburg Research that sparked a more than $150 billion rout in Adani Group stocks. Founder Adani said this month the group plans to invest $10 billion in energy and infrastructure projects in the US. 

 

Adani’s planned bond is set to add to a recent spate of corporate issuance. Borrowers including Alibaba Group Holding Ltd. and State Bank of India have sold more than $7.5 billion of debt the first two days of this week, one of the busiest periods over the last month.