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Muthoot Finance raises $400 million via USD notes, oversubscribed 3.9x

The funds raised will be used for onward lending and other activities permitted under the external commercial borrowing guidelines of the Reserve Bank of India

Muthoot Finance

BS Reporter

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Gold loan financier Muthoot Finance on Wednesday said it has raised $400 million (approximately Rs 3,350 crore) by issuing senior secured USD notes. The notes carry a coupon rate of 6.375 per cent and have a door-to-door maturity of 4.5 years, with an average maturity period of 4 years.
 
Senior notes are secure, high-yield bonds that have first claims on the company’s cash flows.
 
The order book peaked at over $1.3 billion, with an oversubscription of 3.9 times and final participation from over 125 investors across the globe.
 
The bonds are rated ‘BB’ by Fitch and S&P ratings. Deutsche Bank and Standard Chartered Bank were the arrangers and dealers for the issuance.
 
 
The funds raised will be used for onward lending and other activities permitted under external commercial borrowing (ECB) guidelines of the Reserve Bank of India (RBI), the company said.
 
In FY24, the company had raised $750 million under the external commercial borrowing (ECB) route for a period of 3.75 years at a coupon of 7.125 per cent. Previously, the company raised $450 million in 2019 and $550 million in 2020, which has been repaid on respective due dates in 2022 and 2023 respectively.
 
“This fund raise will further strengthen our partnership with global investors. We saw a great response from global investors on the back of our resilient performance, commitment to our customers, and a successful track record of gold loan business in India,” said George Alexander Muthoot, Managing Director, Muthoot Finance.
 
“This also helped us in reducing the coupon rate on the notes to 6.375 per cent vis-à-vis the earlier issuance at a coupon rate of 7.125 per cent even though the period has increased to 4.5 years compared to 3.75 years for the previous issue. The issue will help the company to achieve higher loan disbursements as well as further diversify the sources of its borrowing and widen the investor base,” he added.  
 

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First Published: Oct 23 2024 | 5:51 PM IST

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