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Adani Ports sees strong demand for $750 million bonds

Adani Ports sees strong demand for $750 million bonds

26 Jul 2021

MUMBAI: Apollo Asia, ChinaAMC, China Everbright, Millennium, BFAM Asia and Emirates NBD group company are among global investors, who bid for Ports and SEZ’s long term bonds that opened for subscription Monday.

The company raised $750 million for which it obtained bids over $2 billion, said dealers.

The proceeds may be used for a combination of capital expenditure and other corporate activities.

Individual investors could not be contacted immediately for comments.

Three global rating companies including Moody’s, Fitch and S&P marked the bonds with the lowest rank in the investment-grade category: Baa3 or BBB-.

Those bonds have two tranches with 10-year and 20-year maturities. Initially, they were proposed to offer 280 basis points over the US Treasury for the first series and 5.25 percent in the longer series, dealers said.

The final pricing was tighter by 25 basis points in both sets of bonds offering UST plus 255 bps and 5 percent due to higher demand.

“Demand was a bit skewed towards the longer maturity papers ,” said a senior executive involved in the bond sale.

Axis Bank, Barclays, Bank of America, JPMorgan, MUFG and Standard Chartered are among others that helped the company raise the bond funds.

Moody’s expects that APSEZ’s credit profile will withstand the impact of the coronavirus pandemic given its moderate financial profile and robust liquidity heading into the fiscal year 2022, as well as its ability to postpone capital spending.

In a separate offering, ACME Solar is planning to raise $300-500 million via offshore bonds that may be launched Tuesday or the day after.

Fitch Ratings assigned India Cleantech Energy’s (ICEL) proposed dollar-denominated bonds with BB-(EXP) grade, a rank in the high-yield category but with a stable outlook. Those papers will have a five-year maturity and be marked as a part of the Environment, Social and Governance (ESG) exercise, a source of raising cheaper money.

“The rating on the notes reflects the credit profile of a restricted group of 12 entities (Acme RG1) that are fully owned by Acme Solar Holdings Private Limited,” Fitch said in a note. India Cleantech Energy is a wholly-owned subsidiary of the ACME.

ICEL will likely use the proceeds to subscribe to non-convertible debentures (NCDs) to be issued by a newly formed restricted group (RG) comprising a dozen directly or indirectly wholly-owned or majority-owned subsidiaries of ACME Solar Holdings (ACME Solar).

Acme RG1 operates solar generation assets with a combined capacity of 450MW (or 605MWp) in eight Indian states. ICEL is an orphan financing vehicle incorporated in Mauritius that will be held by a trust and its ownership is not linked to Acme Solar Holdings.