Muthoot Finance Ltd Raises USD 550 Million from International Bond Markets

KOCHI:
Muthoot Finance Ltd (“MFIN” or “Company”), the largest gold loan company in India, has successfully priced a USD 550 Million Fixed Rate Senior Secured Note issuance in 144A / Reg S format for a 3.5 year tenor at 4.400%. The company had successfully placed USD 450 Million for a 3 year tenor at 6.125% in October 2019. The proceeds of the issue will be used for permitted purposes including onward lending in accordance with RBI’s ECB Guidelines and other applicable laws.

The transaction was officially launched on Feb 18, 2020, following which the company engaged several investors during a series of fixed income investor calls in Hong Kong, Singapore, London and US. On the back of high quality feedback, the transaction was launched with an initial pricing guidance of 4.750% area on Feb 20, 2020. Following a strong order book momentum supported by high quality real money investors, the Company was able to tighten pricing by 35bps to 4.400%.

The final order book was in excess of USD 1.6 Billion with oversubscription of more than 2.9x. The transaction witnessed 38% participation from Asia, 13% from Europe and 50% from US; with 89% investments from fund managers, 6% from private banks, 3% from insurance & banks and 2% from others.

The bonds will be listed on International Securities Market of the London Stock Exchange. Company has issuer rating of Long Term rating of ‘BB+’ with ‘Stable’ Outlook by Fitch Ratings, ‘BB’ with ‘Stable’ Outlook by S&P Global Ratings and ‘Ba2’ Corporate Family Rating with ‘Stable’ Outlook by Moody’s Investor Service. Deutsche Bank and Standard Chartered Bank acted as the Joint Global Coordinators and Joint Book Runners for the issue.

M.G.George Muthoot, Chairman, on this issue stated, “The response from international bond investors in our second issue is quite overwhelming. We are glad to know that global investors have understood our unique credit story acknowledging our long track record in gold loan business. This is a recognition of India’s NBFC sector. This fund raise will enable us in further diversifying and strengthening our sources of funding. We look forward to strengthening our partnership with global investors.”