Money & Banking

Muthoot Finance raises $550 million from international bond markets

Our Bureau Kochi | Updated on February 21, 2020 Published on February 21, 2020

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The company had successfully placed $450 million for a three-year tenor at 6.125 per cent in October 2019

Gold loan company Muthoot Finance has successfully priced a $550-million Fixed Rate Senior Secured Note issuance in 144A/Reg S format for a 3.5-year tenor at 4.4 per cent.

The proceeds of the issue will be used for permitted purposes, including onward lending in accordance with RBI’s ECB Guidelines and other applicable laws.

The company had successfully placed $450 million for a three-year tenor at 6.125 per cent in October 2019.

The transaction was officially launched on February 18, following which the company engaged several investors during a series of fixed income investor calls in Hong Kong, Singapore, London and the US. On the back of high-quality feedback, the transaction was launched with an initial pricing guidance of 4.750 per cent on February 20. Following a strong order book momentum supported by high-quality real money investors, the company was able to tighten pricing by 35 bps to 4.40 per cent.

The final order book was in excess of $1.6 billion with an oversubscription of more than 2.9x. The transaction witnessed 38 per cent participation from Asia, 13 per cent from Europe and 50 per cent from the US; with 89 per cent investments from fund managers, 6 per cent from private banks, 3 per cent from insurance and banks and 2 per cent from others.

The bonds will be listed on the International Securities Market of the London Stock Exchange.

The company has issuer rating of Long Term rating of ‘BB+’ with ‘Stable’ Outlook by Fitch Ratings, ‘BB’ with ‘Stable’ Outlook by S&P Global Ratings, and ‘Ba2’ Corporate Family Rating with ‘Stable’ Outlook by Moody’s Investors Service.

MG George Muthoot, Chairman, said, “The response from international bond investors in our second issue is quite overwhelming. We are glad to know that global investors have understood our unique credit story acknowledging our long track record in gold loan business. This is a recognition of India’s NBFC sector. This fund-raiser will enable us to further diversify and strengthen our sources of funding.”

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Published on February 21, 2020
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