- By Aditya Pratap Singh
- Thu, 16 Jan 2025 09:34 AM (IST)
- Source:JND
Vedanta Resources, owned by mining magnate Anil Aggarwal, has raised US$11 billion through a new bond issue to prepay existing debt, the company said in a Singapore exchange filing. Vedanta Resources Finance II Plc, a wholly-owned subsidiary of Vedanta Resources, has raised US$1.1 billion in a new double tranche issue in the international debt capital markets. Vedanta Resources Ltd has raised US$3.1 billion in September 2024 bonds.
According to the transaction filing, the latest bond issue consists of two tranches - US$550 million and 9.475 per cent interest rate for 5.5 years and US$550 million for 8.25 years at 9.850 per cent interest rate.
Both tranches received strong investor demand, with the bonds receiving US$3.4 billion in final orders from more than 135 accounts, representing a 3.1x oversubscription, the company said.
It said the net proceeds from the bond issue would be used to prepay Vedanta’s outstanding bonds (including any accrued interest thereon), to pay any transaction costs related thereto and to repay other debt.
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Major investors include marquee investors from the US, EMEA (Europe, Middle East and Africa) and Asia.
Ajay Goel, the company's Chief Financial Officer, said, "The latest transaction marks the complete refinancing of Vedanta's restructured bonds. The strong interest in the series of transactions reflects significant investor confidence in the several strategic steps that Vedanta has taken over the last several quarters in terms of delivering record production, cost rationalisation and deleveraging."
The bonds are expected to be rated ‘B’ by S&P Global and ‘B2’ by Moody’s Ratings. Moody’s recently upgraded VRL’s Corporate Family Rating (CFR) from B2 to B1 in light of recent developments.
The final bond allocation includes 61 per cent from Asia, 30 per cent from EMEA, 9 per cent from the US, 54 per cent from Asia for 5.5 years, 30 per cent from EMEA and 16 per cent from the US for 8.25 years.
Through four consecutive international bond transactions from September 2024, VRL is refinancing US$3.1 billion in bonds. The total amount of US dollar bonds raised by Vedanta represents the largest amount raised by an Indian issuer post-2022.
VRL is expected to use the proceeds to refinance US$600 million in bonds maturing in April 2026 and US$460 million in notes maturing in December 2028, Creditside said in a note.
Two major firms, Moody’s and S&P Global, recently upgraded their ratings on VRL and its instruments, citing recent developments.
On Jan. 13, Moody's said it raised VRL's corporate family rating from B2 to B1 and senior unsecured bonds guaranteed by VRL from B3 to B2, marginal upgrades while maintaining a stable outlook. VRL’s proposed senior unsecured bond issue is rated B2 by Moody’s.
"The bond issuances in quick succession solidify Vedanta's access to capital markets and demonstrate increasing investor confidence in the company. The recent transactions underscore management's proactive approach to liability management, which positively impacts our assessment of Vedanta's governance scores" Nidhi Dhruv, Moody's
S&P Global also assigned an initial rating of ‘B’ to VRL’s senior unsecured bonds on 13 January. This is a significant improvement over the current rating. This leaves Credit Watch's rating in a positive position.
(With Inputs From PTI)
