Vedanta Resources raises $400 million via bond tap issue

Vedanta Resources has raised $400 million through a follow-on, or tap, issue of a triple-maturity bond priced in June this year.

With these new bonds, the total amount the company has raised through these instruments has swelled to $2.15 billion.

The company had raised $1.75 billion late June through a three-tranche issuance of dollar bonds, as part of its attempt to retire high-cost debt of about $2 billion.


The new bonds maturing in 2032, 2034 and 2037 will be priced at 7%, 7.37% and 7.75% almost in line with the bonds issued in June, people familiar with the details said.

"With this new tranche refinancing of the existing bonds is now complete. These bonds help the company reduce costs and also elongate the tenure,” said a person familiar with the details. “The bonds these new securities will replace were taken at a higher cost of between 9.20% to 9.50%. They were also maturing sooner in 2030, 2032 and 2033. This refinancing takes care of both cost and tenure."

ET could not ascertain the break-up of the $400 million in the different tenures. A Vedanta spokesperson did not reply to an email seeking comment.

Just like in June, the money was raised by Vedanta Resources Finance II Plc, a wholly owned subsidiary of UK-based Vedanta Resources

In June, the company had raised $500 million through six-year bonds at a coupon of 7%, $700 million through eight-year bonds at a 7.37% coupon, and $550 million through 11-year bonds at a coupon of 7.75%. These bonds were priced at 25 basis points below the initial price guidance.

The company aims to buy back $550 million of the 9.475% 2030 bond, $500 million of the 11.25% 2031 paper, $500 million of the 9.125% 2032 bond, and $550 million of the 9.85% 2033 notes.