GMR Hyderabad Airport raises $350 mn via dollar bonds; set to deploy it to refinance loans

GMR Hyderabad International Airport (GHIAL) has raised 0 million by issuing securities and the proceeds will be utilised to refinance loans as well as partially fund capital expenditure. (Image: Reuters)

GMR Hyderabad International Airport (GHIAL) has raised $350 million by issuing securities and the proceeds will be utilised to refinance loans as well as partially fund capital expenditure. At the current exchange rate, $350 million amounts to around Rs 2,275 crore. GHIAL had priced its dollar bonds at 4.25%, sources close to the deal told FE. An investment banker even claimed this to be the tightest ever pricing on a bond from a high-yield issuer out of India. FE could not independently verify this claim.

“The funds would be used for refinancing its existing loans and for capex as well,” a banker indicated. Roadshows for the 144A issue — in which US investors can also participate — had begun across New York, London, Hong Kong, Boston and Singapore. While Moody’s Investors Service has assigned a first-time corporate family rating of Ba1 to GHIAL, S&P Global Ratings assigned ‘BB+’ long-term corporate credit rating. Bank of America Merrill Lynch and HSBC were the joint global coordinators for the issue. These two banks along with Citi and JP Morgan were the joint book-runners and joint lead managers as well.

Overseas investors have been bullish on foreign currency Indian bonds even as the supply from the country still remains miniscule compared to that of others like China. However, issuances from India this year have hit $12.35 billion surpassing previous records.GHIAL’s website indicates the company is promoted as a JV comprising the GMR Group (63%) in partnership with the government of India (13%), government of Telangana (13%) and Malaysia Airports Holdings Berhad (11%).

The company’s financial statement points out that as on March 31, 2017, borrowings stood at Rs 1,965.12 crore of which Rs 421.15 crore is a foreign currency loan from banks, Rs 1,228.92 crore accounts for rupee term loans from banks and Rs 315.05 crore accounts for loan from the government of Telangana. The firm had reported a 71.11% rise in its net profits to Rs 107.80 crore for Q1FY18 compared to a year ago. Gross revenues had also risen by 15.22% to Rs 293.60 crore in Q1.

Domestic passenger traffic grew by 23% to 3.3 million in Q1 while international passenger traffic grew to 0.9 million. Total passenger traffic grew by 19% to 4.1 million. GMR group’s Delhi International Airport had tapped the dollar bond market last year to raise $522.60 million by issuing 10-year bonds at 6.125%.