Vedanta Resources tests demand for offshore dollar bonds after Adani indictment: report

Vedanta Resources Ltd is moving forward with its second dollar bond offering in just two months, gauging investor interest in Indian offshore debt soon after the US indictment of Adani Group founder Gautam Adani.

A subsidiary of Vedanta, a London-based miner that operates primarily in India, is issuing a callable note, according to people familiar with the matter who spoke anonymously. The bonds will be divided into two tranches with maturities of 3.5 and seven years. Initial price targets are set at 10.375 percent and 11.375 percent, according to a Bloomberg report.

Business today I couldn’t check the development myself.

The placement, which could raise up to $500 million, is the first since the Adani crisis and will serve as a key test of global demand for Indian high-yield loans following the allegations against Adani. The notes also have call options.

In September, Vedanta Resources raised $900 million in its first dollar bond issue in more than two years, with a coupon of 10.875%.

Vedanta will use proceeds from the latest sale to refinance its issued bonds due in 2028, a Reuters report said. Citigroup, Barclays, Deutsche Bank, JPMorgan and Standard Chartered Bank are joint global coordinators and lead managers of Vedanta’s dollar bonds, the company added.

Parent Vedanta has a net debt target of $4.5 billion by the end of FY25. In its earnings call earlier on November 8, Vedanta management noted that parent VRL has reduced debt by $4.7 billion over the past two and a half years. period, bringing it to $4.8 billion, which was the lowest level in a decade. . According to management, VRL’s debt fell by about $1 billion in the first half of 2015. That was more than a promised reduction of $3 billion over three years.

Vedanta’s $4.8 billion debt has three components. He has $3 billion in bonds. It has about $1 billion in bank loans and the remaining about $850 million is a private loan from StanChart.

In the September quarter, VRL refinanced $1.2 billion of bonds. Of these, the last tranche had a yield of 9.99%. Overall, this refinance was 3 percent cheaper, resulting in annual savings of over Rs 300 crore, Vedanta management suggested in its earnings call.