IOC maiden dollar issue subscribed 13 times

The country’s biggest fuel retailer, Indian Oil Corporation, today said its maiden $500-million, five-year bond issue received an overwhelming response from investors in the international market with an order book of $6.5 billion, representing a subscription of 13 times. This is perhaps the highest subscription of any Asian dollar corporate bond in recent times, despite concerns about the company’s health on the back of the huge subsidy burden.

The bond, priced at 205 basis points over the US dollar mid-swaps, will be used by IndianOil to fund capital expenditure for its vast portfolio of ongoing projects.

Speaking after the successful outcome of the bond placement, SV Narasimhan, director (finance), IndianOil, said, “The exceptional response received by our debut US dollar bond issue is an eloquent testimony to the confidence that global investors have reposed in IndianOil and an acknowledgement of the strong fundamentals of the Indian economy. This transaction also broadens our international investor base substantially and enhances our financial flexibility for the future.”