Tata Motors to raise SGD 300-400 million from Singapore debt market

Tata Motors is set to tap the Singapore debt market to raise S$300-400 million ( Singapore Dollars) this month. According to sources close to the development, the company is in talks with merchant bankers for the issue and it is in the process of appointing lead managers for the same. This comes close of the heels of Tata Steel raising SGD 1 billion from the Singapore debt market.

Sources say the issue may be priced at close to 350-400 basis points above LIBOR. The Singapore debt market is believed to be one of the most active and liquid in the region, which is why a number of Indian corporates have started accessing it. It also is a market which requires a smaller benchmark and lesser disclosures than the US and other markets.

According to a merchant banker speaking on the condition of anonymity, a number of Indian corporates with overseas funding needs are being advised to tap the Singapore, Australian and Chinese debt markets. “Tapping markets like Singapore and Australia will help firms diversify their funding base, while the majority of their overseas funding requirements will come from the US-Dollar market,” said the banker.

According to sources close to the development, Tata Motors is raising funds for overseas capex for Jaguar-Land Rover. The company has seen its domestic business go through a major slump of late. Its domestic volumes have slumped 15% in April, while JLR’s volumes have risen 17% in March.