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Tata Capital raises $400 million through maiden international bond

Tightens pricing by 33 bps over initial guidance

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The Tata group’s unlisted financial services businesses have reported hefty profits for the year, with Tata Capital, the group’s financial services business, reporting a profit of Rs 2,492 crore on revenues of Rs 13,309 crore, as per Tata Sons' annua

The company engaged with global investors in Hong Kong, Singapore, and London. | Photo: Company website

Abhijit Lele Mumbai

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Tata Capital Ltd, the financial services arm of the Tata group, has raised $400 million through its maiden international bond carrying an interest rate of 5.38 per cent. The tenor of the senior unsecured bond is 3.5 years, and proceeds will be deployed in business operations, including lending.
 
In a late-night press statement, Tata Capital said that on the back of strong investor interest, the transaction was launched with an initial price guidance of US Treasury (UST) plus 125 basis points (bps). Following strong book building, supported by high-quality investors, the company was able to tighten pricing by 33 bps to UST 92 bps.
 
 
Rajiv Sabharwal, Managing Director and Chief Executive Officer, Tata Capital, said the success of the transaction illustrates the confidence of investors in Tata Capital's strong credit profile, backed by its focus on a diversified and granular loan book. “The transaction will further strengthen our liability profile and diversify funding sources,” he added.
 
The company engaged with global investors in Hong Kong, Singapore, and London. The bond received an overwhelming response from investors, with the final order book oversubscribed by more than four times. The transaction witnessed global investor participation from Asia and EMEA across asset managers, insurance companies, banks, and others, the company said.
 
BNP Paribas, HSBC, Standard Chartered Bank, and MUFG acted as joint global coordinators and joint bookrunners, while J.P. Morgan acted as a joint bookrunner for this transaction.
 
In December 2024, S&P Global Ratings had assigned its 'BBB-' long-term foreign currency issue rating to a $2 billion medium-term note (MTN) programme of Tata Capital Ltd.
 
The senior unsecured notes will constitute direct, unconditional, and unsubordinated obligations of Tata Capital. They will rank equally at all times with all other senior unsecured obligations of the finance company.
 
Tata Capital must maintain a minimum security coverage ratio of at least 1.0x for the senior secured notes. There are also covenants requiring Tata Capital to maintain regulatory capital ratios above the regulatory minimum and a net non-performing assets ratio of less than or equal to 5 per cent.

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First Published: Jan 14 2025 | 11:18 PM IST

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