Vedanta Resources raises $1.7 billion in country's largest offshore bond offering

KOLKATA: Vedanta Resources Plc., has announced the pricing of its offering of bonds in the aggregate principal amount of $1.7 billion. The bonds are being offered and sold in two tranches, consisting of (i) $1.2 billion aggregate principal amount of 6% bonds due January 2019 and (ii) $500 million aggregate principal amount of 7.125% bonds due May 2023.

In a statement issued on Thursday, Vedanta termed it as a landmark transaction for the company and said it believes this represents one of the largest corporate high yield bond issuances out of Asia,ex-Japan.

Vedanta intends to use the proceeds of the offering to refinance a portion of its obligations under its existing 2010 term loan facility that was entered into to partly finance Vedanta's acquisition of a controlling stake in Cairn India. This is likely to result in a cancellation of Vedanta’s commitments under a bridge facility, and to pay related fees and expenses and for general corporate purposes.

Commenting on it, Anil Agarwal, chairman of Vedanta Resources Plc., said: “This transaction demonstrates the financial strength and global recognition of Vedanta Group as a major natural resources corporate. It is our fourth bond transaction and each time we have been met with increasingly overwhelming response by investors.”

The bonds are being offered and sold in a private offering to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended ("Securities Act"), and outside the United States under Regulation S under the Securities Act. The offering is expected to close on June 3, 2013, subject to customary closing conditions.

Bank of America Merrill Lynch, Barclays, Citigroup, J.P. Morgan, The Royal Bank of Scotland and Standard Chartered Bank are acting as joint global coordinators, joint lead managers and joint bookrunners and Deutsche Bank is acting as joint bookrunner.