Agrochem player UPL Group raises $500m from overseas bond sale

Leading agro-chemicals player UPL Group has raised USD 500 million debt by selling bonds to overseas investors, making it the first issuance by a domestic chemicals firm with investment grade ratings so far.
In a filing to the BSE, UPL said, "Our wholly-owned subsidiary UPL Corporation Ltd has successfully completed the pricing of its USD 500 million senior unsecured notes at 3.25 per cent per annum, due 2021."
UPL Corporation is a Mauritius-based fully-owned subsidiary of UPL, which was earlier known as United Phosphorus Ltd.
The five-year USD bond issue was oversubscribed 2.2 times, merchant banking sources told PTI.
Sources said the proceeds would be utilised to repay debt and working capital requirement.

They said this is the first-ever bond deal from agro-chemical space not only from here but across Asia.

Due to the good demand, the issue could manage an aggressive pricing and the final pricing got tightened by 20 basis points and could fix the yield at 200 basis points over the US treasury at 3.26 per cent while the annual coupon is fixed at 3.25 per cent.
UPL Corp contributes 75 per cent of revenues and is the holding company for all of UPL's international agro-chemical operations. For the group as a whole, its branded generics account for an overwhelming 80 per cent of its revenue.

The 144A Reg S issue also have another first: this is the maiden investment grade USD bond issued by a global holding company of a domestic company without a guarantee from the parent, the merchant banking sources said.
UPL is the third largest post-patent crop protection company globally and makes most of its income from the home market and Latin America.
Deutsche Bank, ANZ, Citigroup, Credit Suisse, and JP Morgan were the joint bookrunners of the deal.
The instrument, which will be listed on the Singapore Stock Exchange, was snapped up Asian investors (62 per cent), American (20 per cent), and European investors (18 per cent), who constituted fund managers/asset managers (92 per cent), banks (3 per cent), private banks (3 per cent) and institutions/ corporates/others the remaining 2 per cent.

The city-headquartered UPL Group, headed by Rajnikant Shroff, is one of the largest agro-chemicals players globally, operating in the post-patent markets and makes four fifths of its revenue for branded generics. In 2016 fiscal year it reported a profit of Rs 2820 crore on a revenue of Rs 13,080 crore.
UPL board gave the mandate to issue a benchmark bond issue on September 28. Its shares closed flat on BSE at Rs 683.75 while benchmark Sensex closed 115 points down.