Vedanta, NTPC raise $1.5 bn in offshore bonds

Vedanta's five-year bonds were priced at a coupon of 6.375%

Vedanta Resources and NTPC Ltd on Wednesday raised a combined about $1.5 billion through two offshore bond issuances.

While Vedanta raised $1 billion, state-owned NTPC raised 500 million euros.

According to a statement from Vedanta, the company’s five-year bonds were priced at a coupon of 6.375%. The proceeds will be used primarily to fund its offer to purchase for cash some of its outstanding bonds. Vedanta’s bonds were privately placed.

Meanwhile, NTPC’s bond issuances were for 10 years, the longest euro-denominated bonds that an investment grade company has offered from the country.

The NTPC deal was launched at London for a price of euro mid-swaps (roughly 0.84 per cent) plus 225 basis points. The deal witnessed significant participation from Asian, Middle Eastern & European accounts and was fully covered within a short span of time. Therefore, the price could be tightened further to euro mid-swaps plus 200 basis points, which is a significant tightening of 25 basis points.

Shashikant Rathi, head of treasuries and markets, Axis Bank, which acted as a book runner for the deal, said the deal was a “landmark issuance and will make the European markets more accessible to Indian Issuers.”