Gold loan company Muthoot Finance Ltd announced on Friday that it has raised $550 million in senior secured notes for a three-and-a-half-year tenure. The fixed-rate instruments come with a coupon rate of 4.400 per cent. This is the second bond issue by the company, after placing $450 million for a three-year tenure at 6.125 per cent in October 2019. Both issues form part of a $2-billion global medium-term note programme.
The issue proceeds will be used for onward lending in accordance with RBI’s ECB Guidelines and other applicable laws, among other things. The bonds will be listed on the International Securities Market of the London Stock Exchange.
M G George Muthoot, chairman, Muthoot Finance, said, “The response from international bond investors to our second issue is quite overwhelming. We are glad that global investors have understood our unique credit story and have acknowledged our long track record in the gold loan business. This isse will enable us in further diversifying and strengthening our funding sources. We look forward to strengthening our partnership with global investors.”
The transaction was officially launched on February 18, 2020, following which the company engaged several investors during a series of fixed-income investor calls in Hong Kong, Singapore, London and the United States. On the back of quality feedback, the deal was launched with an initial pricing guidance of 4.750 per cent area on February 20. Following strong order book momentum supported by high quality real money investors, it was able to tighten the pricing by 35bps to 4.400 per cent, the company added.
The final order book exceeded $1.6 billion with oversubscription of more than 2.9x. The deal had 38 per cent participation from Asia, 13 per cent from Europe and 50 per cent from the US. Eighty-none per cent of the investments came from fund managers, six per cent from private banks, three per cent from insurance firms and banks and two per cent from others.
The company has a network of 4,536 branches across 23 states, the National Capital Territory of Delhi and five union territories. It has a head count of 25,149 and its loan assets stood at Rs 38,498 crore on December 31, 2019.