RCom comes up with $300 million from overseas debt

DELHI, India - May 15, 2015 - PRLog -- Anil Ambani-led Reliance Communications (RCom), the nation’s fourth largest telecom operator, has raised $300 million through selling out its 5.5-year dollar debt at 6.5 %, confirms a press statement from the company. "The company has launched, closed and priced the issue of Notes on April 27, 2015. The Notes have a tenor of 5-1/2 years due in 2020 and carry a coupon of 6.5 per cent per annum, payable semi annually. The Notes are expected to be settled by May 6, 2015. The Notes will be listed on the Singapore Stock Exchange," the statement states.

The company priced at 6.5% its $300-million dollar bond issue, which got oversubscribed with over 100 investors participating.

The issue drew a lot of investment from across Asia, Europe, and Middle East, reports Chartered High Yield Product Group, one of the merchant bankers for the issue. This also happens to be the first dollar bond issued by the company, also a first for any domestic telco to dip their toes into.

It also turns out to be the largest issuance of its kind in 2015, and could well be a gateway to more such issuances coming along from India. It’s interesting that the company first came up with a bond issue last November but be pulled back because it couldn’t hit the mark with pricing. Unlike the last time, the issue managed to draw in ratings from Moody’s and Fitch, both of which have assigned Ba3 and BB ratings respectively.

Moody’s explained its Ba3 accreditation to be in line with its corporate mandate, citing that the notes are senior secured obligations of the company. The proceeds from the issue will go into scaling up capital expenditure or any other permissible end-use as prescribed by the Reserve Bank, Moody's said.

RCom had won spectrum in the March auctions at Rs 4,300 crore, which included an upfront payment of Rs1,100 crore which amped up its debt to 4.8 times its equity.  Part of the proceeds from the issue will be directed towards funding the spectrum payout, with the rest invested for capex purposes, said Fitch Ratings.

It’s noteworthy that after 2014, the Indian corporate fraternity had held back from the overseas debt market, after a record $20 billion debt raising. Through this issue, RCom may just have bucked the trend.

Reference Link-

http://businesstoday.intoday.in/story/reliance-communicat...

http://www.dnaindia.com/money/report-anil-ambani-s-rcom-r...