Shriram Fin raises $500 mln in second bond this year
Shriram Finance has raised $500 million by selling a three-and-a-half-year fixed rate dollar bond at 6.15% to investors across the globe. Strong investor demand helped the company price the bond much lower than initial guidance of 6.50%.
«We saw demand of more than $1.5 billion which helped squeeze the pricing at the lower end of the band ultimately. Shriram is a known name in the overseas market so it is possible that they will look at another issue soon,» said a person familiar with the transaction.
Shriram had initially planned a twin bond issuance of 3.5 years and five years to raise at least $800 million but decided to do only a single bond issue and wait for rates to ease further.
«Interest rates in the US are expected to come off further so Shriram must have thought that they can always wait for another benchmark five year issue when rates settle,» said a second person familiar with the details.
The US Federal Reserve cut its benchmark rates by 50 basis points last week, the biggest such action post Covid as its focus shifts towards growth from inflation. As a result the spread between the US treasuries and emerging market bonds like India have eased. Indian companies like Shriram are hoping to cash in on the extra liquidity provided by the US action.
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