Adani Ports raises $500 million in overseas bond sale

Adani Ports raises $500 million in overseas bond sale

The company said the senior unsecured US dollar note was oversubscribed six times by marquee international investors

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The country's largest port operator Adani Ports and Special Economic Zone on Thursday said it has raised USD 500 million by selling 10-year bonds to international investors at a coupon of 3.10 per cent.

The company said the senior unsecured US dollar note was oversubscribed six times by marquee international investors, helping it fix the coupon at a low 3.10 per cent. Last July, it had paid 4.2 per cent for a similar issue of USD 750 million.

"The issue received tremendous response from marquee investors from key markets and geographies, enabling the order book to build around six times leading to tightening of the spreads and final pricing at 3.1 per cent," Adani Ports said in a statement.

This is the third large bond sale by domestic issuers after Exim Bank's USD 1 billion issue at record low prices in the first week of the month, followed by State Bank of India in the second week with a USD 6-million bond sale.

The company is also in the international bonds market with a USD 500-million Reg S issue.

Regulation S bonds are issued by foreign issuers in the US debt market and are denominated in US dollars, but resident American citizens cannot subscribe to them.

This is the third dollar debt issuance by Adani Ports this fiscal-- USD 750 million in July 2020 and USD 300 million in December, totalling USD 1.55 billion.

The company has for long been raising cheaper forex debt to refinance or retire higher-priced debt raised to fund its acquisition-driven ports expansion. The Adani group as a whole is also one of the highly leveraged companies with tens of billions in debt.

Its Chief Executive and Wholetime Director Karan Adani said the current issuance is part of the company's capital management programme to extend debt maturity and refinance debt.

At 3.1 per cent coupon, this is the cheapest dollar debt the company has raised so far, he added.

With 11 operational ports and terminals, many of them acquired, Adani Ports is the largest port operator in the country.

While Reg S issue means resident American investors can't subscribe to the issue, benchmark issue means a large issue with the quantum being at least USD 500 million.

The company will use the proceeds from the issue for primarily for refinancing the early redemption of its dollar bonds due in 2022.

The issue has been rated BBB- by Fitch and Baa3 by Moody's.