Delhi airport bond issue over subscribed 16 times, raises $289 mn

Proceeds will be used by Delhi airport to repay foreign debt of same amount

Delhi International Airport Ltd (DIAL) has raised $289 million (Rs 1,750 crore) by issuing seven-year bonds. The issue was subscribed 16 times. Proceeds from the issue, closed on Tuesday evening, will be used by the airport to repay foreign debt of the same amount.

The overall debt of DIAL, a joint venture between the GMR group and the Airports Authority of India, stands at about Rs 5,000 crore. The issue was jointly managed by Citi and Standard Chartered Bank and had a stable credit rating. A source said the bonds had a coupon rate of 6.12 per cent. “The bond issue has been subscribed about 16 times, with an order book of about $5 billion,” he added.

“DIAL is the first corporate high-yield bond to be issued in Asia this year. The investor response has been remarkable, with the offering subscribed several times. It saw several high-quality investors, demonstrating the strength of the DIAL credit story. This will help DIAL reduce interest costs, extend debt maturities, benefit from operational flexibility and deepen capital structure,” said Neville Fernandes, head of capital markets origination, Citi India.

The airport business of GMR group, which also runs the Hyderabad airport, recorded a net profit of Rs 1,279 crore in FY14, against a loss of Rs 86 crore in FY13. The profit was primarily driven by sale of stake in an airport in Turkey.