Top investors rush to own Vedanta overseas bonds

MUMBAI: Billionaire Anil Agarwal’s Vedanta Resources raised about $1.2 billion via sale of overseas bonds, for which it received bids up to $3 billion.

FIL Investment (Fidelity), Macquarie, Goldman Sachs, Value Partners, Eastspring Investments, Barings are some of the investors, who bid to own Vedanta papers, market sources told ET. Individual investors could not be contacted immediately.

The bonds yielded 8.95 percent, about 43 basis points lower than the initial guidance. Bonds were of four-year maturity. The deal was closed Thursday late evening.

The company garnered bids about $2 billion at the start of the sale. The order book is likely to rise after Europe and US markets open.

“The pricing may be tighter at the close of the deal,” said an executive involved in the fund raising.

ET wrote on February 22 that the company would tap offshore bonds, which are rated in the non-investment grade category.

Moody’s Investor Services graded the issuance with Caa1, a rank lower in the high-yield category. JP Morgan is helping the company raise the funds. Last year in August, Vedanta papers offered 13.75 percent when they had raised $1.4 billion.

"The rating confirmation reflects the reduced immediate refinancing risk following VLR's fundraising and debt repayments, in particular at the holding company (holdco)," says Kaustubh Chaubal, Moody's Vice President and Senior Credit Officer. "We now expect the holdco's cash sources will cover its debt maturities, interest and dividend payments through December 2021 as against our previous expectation of a funding shortfall in the quarter ending March 2021."

Holdco VRL used the proceeds of a $1 billion bond issuance in December to repay debt, reducing its immediate refinancing needs. Still, the holdco has $3.3 billion of debt maturing from April 2021 through September 2022, along with annual interest payments of $660 million.