Tata Capital Limited, a diversified Non-Banking Finance Company (NBFC), has raised $400 million through a Fixed Rate Senior Unsecured Reg S Bond offering in the overseas bond market.

This marks the company’s maiden USD bond issuance and is also the First Investment Grade rated issuance from a Tata Group company. This is also the first investment grade rated issuance by a private sector NBFC from India.

The bonds issued are for a 3.5 year tenor at an interest rate of 5.389 per cent. A Reg S status means the bonds issued need not be registered with the US Securities and Exchange Commission. 

Commenting on the bond issuance, Rajiv Sabharwal, Managing Director and Chief Executive Officer, Tata Capital, said, “We would like to thank global fixed income investors for the overwhelming support to our debut USD bond issuance. The success of the transaction illustrates the confidence of investors in Tata Capital’s strong credit profile, backed by its focus on a diversified and granular loan book. The transaction will further strengthen our liability profile and diversify our funding sources.”  

Tata Capital had engaged with global investors in Hong Kong, Singapore and London. On the back of strong investor interest, the transaction was launched with an initial price guidance of UST + 125 bps. Following strong book-building, supported by high quality investors, the company was able to tighten pricing by 33bps to UST + 92 bps. One basis point is one hundredth of a percentage point.

This is the tightest spread over US Treasuries ever achieved for a 3/3.5-year USD-denominated, public, fixed-rate bond issuance by a BBB- rated Issuer from South and South East Asia.

The bond received an overwhelming response from investors, with the final order book over-subscribed more than four times. The transaction witnessed global investor participation from Asia and EMEA across asset managers, insurance companies, banks and others.

BNP Paribas, HSBC, Standard Chartered Bank and MUFG acted as Joint Global Coordinators and Joint Bookrunners, while J P Morgan acted as Joint Bookrunners for this transaction.