India’s Muthoot Finance plans to raise funds through US dollar-denominated bonds maturing in three years and nine months and has given initial guidance for a coupon of around 7.375%, two bankers said on Tuesday.
The price of these U.S. dollar-denominated bonds is expected to be set later today or early Wednesday, the bankers said, declining to be named because they are not authorized to speak to the media.
Muthoot Finance aims to issue benchmark-sized bonds, meaning the issuance will be around $500 million.
The non-banking financial company will use the proceeds of the issue for subsequent lending and other activities permitted under the external commercial borrowing guidelines.
Deutsche Bank and Standard Chartered are joint global coordinators of this dollar bond offering, as well as joint bookrunners with DBS Bank and SMBC Nikko.
The bonds are expected to be rated “Ba2” by Moody’s Investor Service and “BB” by Fitch Ratings and S&P.
Other Indian non-bank lenders, such as Manappuram Finance and state-owned REC, are also looking to raise funds through a dollar bond issue over the coming days.
A growing number of non-banking firms are seeking to raise funds through overseas borrowing, including bonds and loans, likely a result of the Reserve Bank of India’s efforts to diversify their sources borrowing, as Reuters reported in April. (Reporting by Bhakti Tambe; Editing by Savio D’Souza)
