Indian Oil Corporation raises $400 million through Singapore dollar bond

MUMBAI: Indian Oil Corporation has raised $400 million through Singapore dollar bond. The bonds issued by the company mature in ten years, carrying a coupon rate of 4.10%, a senior official from Standard Chartered Bank, which is one of the lead managers of the issue. The coupon offered by IOC is the lowest for a foreign currency bond issuer by any public company in the long tenor bonds category.

Its the largest and longest issuance by an Indian issuer in Asian local currency bond market,", said, Jujhar Singh, MD and Head of Debt C apital Market s South Asia , Standard Chartered Bank "It has been priced 36basis points inside secondary levels of IOC's own USD bonds maturing in 2021,''

So far EXIM Bank, IDBI bank and IOC are some of the Indian entities to have accessed the Singapore dollar market. IDBI Bank and EXIM bank raised $250 million each through Singapore dollar bonds.

The IOC bonds have been subscribed by Asian investors, with 75% of the issue being subscribed to by investors based out of Singapore, majorly by private banks and fund managers. The issue has been over subscribed by 8 times, with the order book of the size of $ 3 billion.

IOC not just raised the Singapore Dollar bonds at a pricing cheaper by 36 basis points over its pricing of dollar bonds, it will save around 75 basis points on its pricing due to lowered withholding taxes, which have been reduced to 5% from 20% earlier.