Delhi Airport plans Rs 3,500 cr bond sale for debt recast

Mumbai: Delhi International Airport (DIAL) is planning to raise ₹3,550 crore through a 15-year bond issue, according to people familiar with the matter.

The proposed bond issue is expected to be priced at about 9.50%, although the final coupon is yet to be determined and will depend on market conditions and investor demand, they said.

The proceeds will be used to refinance DIAL's existing dollar-denominated notes of $522.6 million that are due this year, along with transaction and hedging costs related to the existing debt and the new bond issue. DIAL had raised $522.6 million through 10-year international bonds in October 2016 at a coupon of 6.125%.


"The refinancing will allow DIAL to replace the maturing dollar debt with long term rupee funding, while spreading repayment over several years," said one of the persons, who did not wish to be identified. "The structure also gives the airport operator the flexibility to refinance or redeem the bonds after five years."

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A DIAL spokesperson did not respond to ET's queries.

DIAL is targeting a mid-October pay-in for the proposed issue and plans to finalise investors this month, according to the transaction details. The bonds are expected to carry an AA rating. Interest will be paid every quarter. DIAL plans to repay the principal in stages from the sixth year, with 5% due each year in years six to 10, 10% in years 11-13, 15% in the 14th year and the remaining 30% in the 15th year.