GMR airport subsidiary prices $350-mn bonds at lowest coupon rate

GMR Hyderabad International Airport Limited (GHIAL), a subsidiary of GMR Group, announced that it has successfully priced an offering of $350-million bond in the international market.

The Hyderabad airport operator has entered into a purchase agreement to issue and allot $350 million of 4.25 senior secured fixed rate notes of 10-year tenure. The proceeds from the notes will be used to entirely refinance the current outstanding rupee term bank loan, bank external commercial borrowing and towards the partial funding of proposed capital expenditure.

"We are delighted on the successful pricing of this transaction. The GMR Group, through Delhi International Airport Limited, was the first Indian company to issue 7 year and 10-year-high yield bonds in the infrastructure space. GMR is the only group in India to tap the 10-year dollar bond market in the same infrastructure class across assets.

The offering through GHIAL reinforces our ability to raise funds from the international bond markets. The bond offering reflects our continued effort to create value for our investors and boost liquidity within the GMR Group. The successful pricing of the offering underscores investors' confidence in GMR Group and credit strength of GHIAL," said Grandhi Kiran Kumar, corporate chairman of GMR group.

According to GMR Airports Limited president Sidharath Kapur, the pricing of the offering at a rate of 4.25 per cent reflects the resounding fundamentals of the credit of Hyderabad Airport and that of the Indian growth story. The pricing is a benchmark being the lowest 10-year dollar bond coupon by a corporate high yield issuer from Asia and the lowest dollar bond coupon achieved by an Indian high yield issuer across tenors.

GHIAL is promoted by GMR Group (63 per cent) in partnership with Airports Authority of India (13 per cent), Telangana government(13 per cent) and Malaysia Airports Holdings Berhad Group (13 per cent). The passenger traffic at the airport has crossed 14 million passengers, surpassing the initial capacity of 12 million passengers, last year.

Bank of America Merrill Lynch and HSBC acted as joint global coordinators while Citigroup and JP Morgan acted as joint book runners for the issue with Yes Bank as joint lead manager and Elara Capital as co-manager, according to the company.