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GMR Hyderabad International Airport Ltd (GHIAL) has successfully raised $350 million (about ₹2,276 crore) in the international bond market.
A subsidiary of GMR Airports Ltd and GMR Infrastructure Ltd (GMR Group), GHIAL has entered into a purchase agreement to issue and allot $350 million of 4.25 per cent senior, secured, fixed-rate notes of 10-year tenure.
The proceeds from the issue will be used to entirely refinance the current outstanding Rupee Term Bank Loan, Bank External Commercial Borrowing (ECB) and towards partial funding of proposed capital expenditure.
Kiran Kumar Grandhi, Corporate Chairman, GMR Group, said: “The offering reinforces our ability to raise funds from international bond markets. The offering reflects our continued effort to create value for our investors and boost liquidity within GMR Group. The successful pricing of the offering underscores investors’ confidence in GMR Group and the credit strength of GHIAL.
“GMR Group, through Delhi International Airport Ltd, was the first Indian company to issue seven- 10-year high-yield bonds in the infrastructure space. It is the only group in India to tap the 10-year US Dollar bond market in the same infrastructure class across assets.”
Sidharath Kapur, President, GMR Airports Ltd, said: “The pricing of the offering at a rate of 4.25 per cent pa reflects the resounding fundamentals of the credit of Hyderabad airport and that of the Indian growth story.
“It saw global investment interest from high-quality investors in Asia, Europe and the US, and was oversubscribed multiple times. This pricing is a benchmark — being the lowest 10-year US Dollar bond coupon by a corporate high-yield issuer from Asia and the lowest US Dollar bond coupon achieved by an Indian high-yield issuer across tenors.
“The proceeds of the offering will refinance the bank term loans at Hyderabad airport and is expected to bring a long-dated, efficient, termed-out structure ideal for regulated infrastructure projects into our capital structure.”
This is the third consecutive US Dollar bond offer by GMR Group. It saw price tightening of 37.5 bps from the initial guidance to final pricing.
GMR Group is in the process of taking up a ₹2,600-crore expansion of the Hyderabad airport, which is functioning at full capacity. The airport management has made some adjustments to augment capacity.
The airport’s current capacity is 12 million passengers per annum (mppa), but has managed to handle over 16 mppa in 2016. It plans to expand the capacity to 20 mppa.
Bank of America Merrill Lynch and HSBC acted as joint global coordinators while Citigroup and JP Morgan served as joint bookrunners for the issue, with YES Bank as joint lead manager and Elara Capital as co-manager.
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