MUMBAI: Tata Steel has raised $1.3 billion (about Rs. 8,300 crore) through issuance of unsecured bonds in two tranches in the international markets to repay overseas debt and improve credit profile of the company.
The bond issue comprised $300 million of 4.45 per cent unsecured bonds due on July 24, 2023 and $1 billion of 5.45 per cent unsecured bonds due on January 24, 2028. It was issued by Abja Investment Co Pte, a wholly owned subsidiary of Tata Steel incorporated in Singapore. The bonds are rated BB- by S&P and will be listed on the Singapore Exchange (SGX).
The company had conducted simultaneous roadshows in Dubai, Singapore, London and Hong Kong. Launched on January 18, the bonds at peak attracted a demand worth over $7 billion across tranches and enabled the company to price the issue at about 42 basis points more than the initial price thoughts on both the tranches.
The deal was distributed to a wide number of long term buy-and-hold institutional investors, banks and private banks across regions.
Koushik Chatterjee, ED and CFO, Tata Steel, said proceeds of the bonds will be used to refinance the offshore obligations of the group, which will help de-risk the balance sheet, enhance financial flexibility, diversify the investor base and improve the overall debt maturity profile.
Completion of the refinancing also marks an important step forward to create a sustainable financial structure in preparation for the proposed joint venture in Europe, he said.
