Summit Digitel Infrastructure raises Rs 1,000 cr at a coupon rate of 7.58%

Summit Digitel Infrastructure Ltd, formerly Reliance Jio Infratel, has raised Rs 1,000 crore by privately placing secured redeemable non-convertible debentures (NCDs) at a coupon rate of 7.58 per cent, payable quarterly.

 

Private sector lenders Yes Bank and Axis Bank have subscribed to 30 per cent of the issue size as anchor investors. They are also the arrangers of the issue.

 

The NCDs, rated ‘AAA’ by domestic rating agencies CRISIL and ICRA, have a tenor of seven years and will mature in October 2031.

 

The bond issuance was aggressively priced, considering it is a seven-year bond, according to market sources. Total bids for the issuance reached Rs 1,025 crore, of which the entity accepted Rs 1,000 crore. Sources indicated that there were a total of seven bids submitted for this issuance.

 

Recently, there has been a spate of corporate bonds, which have seen narrow spreads over government securities (g-secs), reflecting strong investor demand for high-quality corporate bonds.

 

The company will use the proceeds of the issuance for refinancing, repayment, and prepayment of existing indebtedness.

 

Summit Digitel Infrastructure is a special purpose vehicle formed by the transfer of tower assets and a portion of liabilities by Reliance Jio Infratel. In December 2019, Reliance Industrial Investments and Holdings Ltd entered into a binding agreement with Brookfield Asset Management Inc for an investment of Rs 25,215 crore by the latter in the units issued by the Data Infrastructure Trust (DIT), after which DIT holds a 100 per cent stake in Summit Digitel Infrastructure.