The Microfinance Institutions Network (MFIN) bond transaction marks the first international bond by an Indian non-banking finance company to debut in 144A/Reg S market, allowing it to tap the US investor base in addition to Asia and Europe.
Kochi (Kerala) [India], Oct 22, 2019 :
Muthoot Finance Ltd, the largest gold loan company in India, has raised 450 million dollars by selling foreign currency bonds to international investors in its maiden issue of such an instrument.
The company plans to use proceeds for both refinancing and other business purposes. The initiative is in accordance with the Reserve Bank of India’s external commercial borrowing guidelines and other applicable laws.
The Microfinance Institutions Network (MFIN) bond transaction marks the first international bond by an Indian non-banking finance company to debut in 144A/Reg S market, allowing it to tap the US investor base in addition to Asia and Europe, Muthoot Finance said in a statement.
The company engaged with investors during an extensive deal roadshow across Singapore, Hong Kong, London and the United States. Backed by strong investor feedback, the transaction was launched with an initial price guidance of 6.375 per cent area. Following a strong order book momentum supported by high-quality real money investors, the company was able to tighten pricing by 25 basis points to 6.125 per cent.
The final order book was in excess of 1.2 billion dollars with an oversubscription of more than 2.5x. The transaction witnessed 37 per cent participation from Asia, 28 per cent from Europe and the Middle East, and 35 per cent from the United States with 88 per cent investments from asset managers, 6 per cent from insurance and pension funds and 6 per cent from others.
The bonds will be listed on the international securities market of the London Stock Exchange. Deutsche Bank and Standard Chartered Bank acted as joint global coordinators and joint book-runners for the issue.
Earlier this month, Muthoot Finance had obtained issuer rating long-term rating of BB plus with a stable outlook by Fitch Ratings, BB with a stable outlook by S&P Global Ratings and Ba2 corporate family rating with a stable outlook by Moody’s Investor Service.
“The response from international bond investors to our debut international bond issue once again reiterates the robustness and long track record of our gold loan business and is a recognition of India’s retail credit story,” said Chairman M G George Muthoot.
“This fundraise will enable us in further diversifying and strengthening our sources of funding. We look forward to strengthening our partnership with global investors.”