Reliance Industries tapped the US dollar bond market for the second time in two weeks as it priced on February 3 a US$750 million offering that extends its debt profile.

The company priced a Reg S/144A 30-year issue at 98.865% with a coupon of 4.875% to offer a yield of 4.948%. This was equivalent to a spread of 262.5bp over the US treasuries or 22.5bp inside the initial price guidance of 285bp area. This was tighter than Reliance’s existing 6.25% 2040 bonds, which were trading at a spread of 268bp before the deal announcement.

The coupon was the lowest ever achieved by an Asian private corporate issuer for a 30-year deal, while the offering represented the first ever single tranche 30-year bonds by a private corporate issuer out of Asia. Reliance likewise continued to be the only issuer out of India to have issued long-dated 30- year US dollar bonds.

The latest transaction was launched following a 10-year deal that was priced on January 22 amounting to US$1 billion. The deal was announced in the Asia morning of February 3 and capitalized on a strong overnight session in the US. It was able to capture the focus of investors amid competing supply and generated a solid Asian order book that was underpinned by interest from high quality real money accounts.

“Like in our previous issuances, we were able to efficiently execute through an intra-day window, despite the volatility in the asset markets,” says Reliance joint CFO V Srikanth.

The transaction continued to gather momentum during the European trading session and the final guidance was announced at Asia close at 265bp area (+/- 2.5bp). It then continued to attract strong interest going into the US open, enabling the arrangers to print the deal at the tight end of the final guidance at 262.5bp.

The final order book amounted to US$2.3 billion from 167 accounts with 47% of the bonds distributed in Asia, 45% in the US and 8% in Europe. By type of investors, fund managers accounted for 52%, insurance companies 31%, pension funds 8%, central banks and sovereign wealth funds 6%, banks 2% and private banks 1%. Bank of America Merrill Lynch, Barclays, Citi and HSBC acted as the joint bookrunners and lead managers for the transaction. – CS