RIL raises $300 mn via pvt placement

Reliance Industries Limited (RIL) has raised $ 300 million through private placement of unsecured notes to US insurance companies.

The Mukesh Ambani-controlled entity becomes the first Indian company to tap US private placement market.

Initially, the offering was for $ 200 million.

However, in response increasing investor confidence in India and the company, the size as raised to $ 300 million.

Alok Agarwal, chief financial officer, said "Accessing this important source of capital not only increases our financial flexibility, but also serves to extend the average maturity of our debt." The proceeds will be used to fund capital expenditure.

The unsecured notes have been placed for 10 and 12 years. They carry average coupon rate of 6.5 per cent. The issue was purchased by a group of 10 large U.S. insurance companies, led by AIG, AEGON and ING.

This transaction provided the opportunity to establish a partnership with some of the foremost institutional investors in the United States, Agarwal said.

The transaction involves bullet maturities of 10 and 12 years, which served to lengthen the company's overall debt maturity schedule and to further diversify its sources of funding.

RIL was the first Asian issuer of 100 year bonds in the international bond markets in 1997. The company had earlier this year also successfully closed the first ever 10 year euro-yen issue by an Asian corporate.