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JSW Steel raising $500 million from overseas bond sale

Moody's said proceeds from the issue will be utilised for retiring some debt and also for capital expenditure

Press Trust of India  |  Mumbai 

Demand for higher steel grades to fuel imports in 2019: CARE Ratings

Leading alloy-maker is entering the dollar market with a benchmark issue to raise up to USD 500 million in debt, sources said Thursday.

The issue has received Ba2 rating with a positive outlook by global ratings agency Moody's Investors Service.

The fund raising is in line with a May 2017 board resolution to raise up to USD 1 billion in one or more tranches by selling bonds in the international markets, the company informed the exchanges.

confirmed that the company is looking to raise up to USD 500 million through the sale.

The company, one of the largest in the country with an installed capacity of 18 million tonne per annum, informed the exchanges that its senior management will be holding roadshows in Hong Kong, and next week for the issuance.

In a note, Moody's said proceeds from the issue will be utilised for retiring some debt and also for capital expenditure.

The company has USD 500 million of senior unscured notes maturing in November and an equal amount in unscured bonds maturing in April 2022, the agency said.

The rating reflects the company's large-scale and strong position in its key markets, good product and end market diversification, it added.

Meanwhile, its peer Fitch Ratings while assigning a 'BB' rating for the issue, said the rating reflects its highly competitive conversion costs and position as one of the largest in the country.

A further increase in planned capex, following a jump in planned capex in 2018, or significant weakening of global could weaken its financial profile, it added.

The agency also cautioned about a likely moderation in the strong margins and risks from acquisitions.

The scrip closed 2.41 percent up at Rs 294.85 on the BSE, as against gain of 0.46 percent on the benchmark.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Sat, April 06 2019. 01:09 IST
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