Billionaire Anil Agarwal’sVedanta Resources is marketing a dollar bond in a crucial test of investor appetite for Indian junk debt.
The commodities giant isoffering a three-year amortizing note with an initial price guidance of around 13.25%, according to a person familiar with the matter.
The fundraising is critical for Vedanta Resources, which plans to delist its Indian unitVedanta Ltd. The proceeds of the offering will be used to partially fund the privatization. Any surplus money will go toward a tender offer of Vedanta Resources 2021 dollar bonds or repayment of the securities at maturity, the person familiar said.
S&P Global Ratingssaid last week that if the privatization goes through, Vedanta Resources’ credit rating is set to be upgraded, and any failure would mean immediate downgrade pressure. Vedanta Resources also plans to fund the privatization with aloan.
While there have been some signs of credit strains easing recently, riskier Indian borrowers have faced push-back from investors as the country grapples with a slowing economy after the world’s biggest lockdown amid the pandemic. ASoftBank Group Corp.-backed renewable energy companypostponed a dollar bond in July.
The last Indian high-yield dollar bond was sold byLodha Developers in March, according to Bloomberg-compiled data.
Barclays Plc, Credit Suisse,Deutsche Bank AG, JPMorgan andStandard Chartered Plc are joint global coordinators and bookrunners for the deal.
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