Muthoot Finance raises $400 mn by dollar bonds with 4.5 yrs maturity time

The country’s largest gold finance company will pay a semi-annual coupon of 6.3750 per cent on this issue, the bankers said, adding that bids opened on Wednesday and closed earlier in the day

India’s Muthoot Finance has raised $400 million through sale of dollar-denominated bonds maturing in four years and six months, two merchant bankers said on Thursday.

The country’s largest gold finance company will pay a semi-annual coupon of 6.3750 per cent on this issue, the bankers said, adding that bids opened on Wednesday and closed earlier in the day.

The company received bids worth over $1.1 billion across investor categories as well as geographies.

Dollar bonds have become increasingly attractive in recent months due to limited supply over the past 1-2 years and a perception of stronger credit profiles of Indian firms, said Deepak Sood, senior partner and head fixed income at Alpha Alternatives.

Muthoot Finance’s bonds are rated BB by S&P Global and Fitch Ratings. Deutsche Bank and Standard Chartered were joint global coordinators and book runners for the issue.

Neither the company nor the banks replied to Reuters’ emails for comment.

The key reasons for the pick-up in dollar bond issuances in 2024 are the relative stability of the rupee and a growing international appetite for Indian bonds, said Maksim Zenkov, deputy head of emerging markets fixed income at financial data aggregator Cbonds.

“As for the estimated quantum of issuances for Oct-Dec, I would expect around $2 billion to $2.5 billion of placements to come based on the maturing amounts,” Zenkov said.

Indian companies have raised around $9.05 billion through dollar bonds this year, compared to $5.7 billion in 2023, data from Cbonds showed.

The companies which have issued such bonds include Vedanta, Piramal Capital, REC, and Indiabulls Housing Finance.