Tata Motors raises $425 million via overseas bonds
An estimated $2.2 billion worth of subscriptions were received against which the company retained about $425 million.
By Saikat Das, ET Bureau | Updated:
Agencies
MUMBAI: Tata Motors Thursday raised about $425 million in an overseas bond sale that saw bids for nearly five times the debt on offer, reflecting investor confidence on revenue visibility at the automaker that owns the iconic Jaguar-Land Rover brands.
Templeton, Blackrock and HSBC are among the bidders that sought to own those papers offering 4.35%, three people familiar with the matter told ET. Individual investors and the borrower couldn’t be contacted immediately.
An estimated $2.2 billion worth of subscriptions were received against which the company retained about $425 million.
Asset management companies, pension funds, and university endowment funds accounted for 80% of the investors, sources said.
Those bonds will mature in the next five years and have a “call option” only after two and a half years.
US Treasury yields, the global benchmark to price any offshore paper, have climbed 60 basis points this year to 1.59% now. But the gauge is still way below its near-term high of 3.22% in October, 2018.
Bank of America Securities, BNP Paribas, Standard Chartered Bank and Mizuho Securities are among those that helped the company raise the funds.
TML Holdings Pte, a wholly-owned subsidiary of Tata Motors, raised those bonds, rated as B and B1 by global rating companies including S&P and Moody’s. Rating companies have recently changed the outlook to ‘stable’ from ‘negative’.
“The stable outlook reflects Moody's expectations of a continued recovery in auto sales in each of TML's operating markets,” Moody’s said in a report. “The stable outlook also incorporates Moody's view that any impact from the resurgence in coronavirus infections in India would be limited to the current quarter.”
The increased use of personal transportation options, as opposed to public transport, will likely keep PV (Passenger Vehicle) demand solid, although this segment has long been a drag on TML India.
Back home, Tata Motors shares rose 0.76 percent to close at Rs 325.45 apiece Thursday on BSE.
Templeton, Blackrock and HSBC are among the bidders that sought to own those papers offering 4.35%, three people familiar with the matter told ET. Individual investors and the borrower couldn’t be contacted immediately.
An estimated $2.2 billion worth of subscriptions were received against which the company retained about $425 million.
Asset management companies, pension funds, and university endowment funds accounted for 80% of the investors, sources said.
Those bonds will mature in the next five years and have a “call option” only after two and a half years.
US Treasury yields, the global benchmark to price any offshore paper, have climbed 60 basis points this year to 1.59% now. But the gauge is still way below its near-term high of 3.22% in October, 2018.
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Bank of America Securities, BNP Paribas, Standard Chartered Bank and Mizuho Securities are among those that helped the company raise the funds.
TML Holdings Pte, a wholly-owned subsidiary of Tata Motors, raised those bonds, rated as B and B1 by global rating companies including S&P and Moody’s. Rating companies have recently changed the outlook to ‘stable’ from ‘negative’.
“The stable outlook reflects Moody's expectations of a continued recovery in auto sales in each of TML's operating markets,” Moody’s said in a report. “The stable outlook also incorporates Moody's view that any impact from the resurgence in coronavirus infections in India would be limited to the current quarter.”
The increased use of personal transportation options, as opposed to public transport, will likely keep PV (Passenger Vehicle) demand solid, although this segment has long been a drag on TML India.
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Back home, Tata Motors shares rose 0.76 percent to close at Rs 325.45 apiece Thursday on BSE.
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