ROADIS' India unit raises $316.3 mn via dollar-denominated bond issuance

ROADIS Group, a PSP Investments owned road investment platform, fully controls the Varanasi-Aurangabad highway

Varanasi Aurangabad NH-2 Tollway, a road entity owned by ROADIS Group, has raised $316.3 million through a dollar-denominated bond issuance, the group said in a statement on Wednesday.

 

Proceeds from the issuance will be used for refinancing and capital expenditure.

 

The bonds carry a coupon rate of 5.9 per cent and will mature in some nine years. VAH is fully controlled by the ROADIS Group, which in turn is a road investment platform of Canadian pension investment manager PSP Investments.

 

VAH is a concession responsible for expanding six lanes, operations, and maintenance of the Varanasi-Aurangabad section of NH-2 from 786 to 978.4 km in Uttar Pradesh and Bihar on a design, build, finance, operate, and transfer toll basis under the National Highways Development Project (NHDP) Phase-V.

 

Deutsche Bank, the sole global coordinator in the transaction, said that the bond offering received an overwhelming response from global investors. The order book peaked at more than $3.3 billion, reflecting an oversubscription of approximately 10.4 times.

 

As many as 144 investors in international markets participated in the issuance, marking their confidence in VAH’s prospects. VAH became the first Indian road concession company to raise US dollar-denominated debt in the international capital markets and to obtain investment grade by Moody’s and Fitch.

 

“India is a principal key market for us, and this successful bond issuance underscores our unwavering long-term commitment to the country. The financing of VAH showcases our capacity to find innovative financing solutions," said José Antonio Labarra, chief executive officer of ROADIS.

 

ROADIS manages 416 km of three highways – NH-2, NH-6, and NH-8 – in Gujarat, Rajasthan, Uttar Pradesh and Bihar.

 

Sameer Gupta, head of India debt capital markets at Deutsche Bank, said the response from global investors to the bond issuance underscores both the credit quality of the issuer and the increasing appetite for international capital for infrastructure assets in India.