Vedanta Resources Raises $1.1bn Through a New Dual Tranche Bond Issuance

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Vedanta Resources has raised $1.1 billion through a new dual-tranche issuance in international debt capital
markets, the company said in a Singapore exchange filing.
As per the exchange filing, the bond issuance consists of two tranches – a $550mn tranche of 5.5 years tenor
at a 9.475% interest rate and a $550mn tranche of 8.25 years tenor at a 9.850% interest rate. Both tranches
garnered strong investor demand with the bonds receiving final orders of $3.4 bn from over 135 accounts,
representing an oversubscription of 3.1x, the company said. The net proceeds will be used to prepay VRL’s
outstanding bonds and pay any related transaction costs.
The final bonds allocation included 61% from Asia, 30% from EMEA, and 9% from US for the 5.5-Year
Tranche and 54% from Asia, 30% from EMEA, and 16% from US for the 8.25-year Tranche.
Ajay Goel, 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 rationalization, and deleveraging.”
VRL has refinanced $3.1bn in US dollar bonds since September 2024 through four successive international
bond transactions. The total quantum of USD bonds raised by Vedanta marks the largest amount raised by
an Indian issuer since 2022. The issuance marks an important step for VRL which has reduced its debt by
$4.6 billion over the past 3 years, bringing it to its lowest level in a decade.
Two major agencies, Moody’s and S&P Global upgraded VRL’s and its instruments’ ratings citing recent
developments. On January 13, Moody’s said it had upgraded VRL’s corporate family rating to B1 from B2
and that on the senior unsecured bonds guaranteed by VRL to B2 from B3, a one-notch upgrade, while
maintaining a stable outlook. Moody’s has assigned a B2 rating to VRL’s proposed senior unsecured bond
issuance.
S&P Global too assigned a preliminary rating of ‘B’ on VRL’s senior unsecured notes on January 13. This is a one-notch upgrade from the current one. It has placed the rating on credit watch positive.

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