MUMBAI: Agrochemicals major UPL Ltd plans to raise up to $500 million through a dollar bond issuance, which will make it the first private India company to tap the dollar bond market since covid-19 disrupted businesses in March.
No Indian private company has raised funds from the dollar bond market since February when companies such as IIFL Finance Ltd and Adani Electricity Mumbai Ltd raised funds through this route.
Last month, state-owned REC Ltd raised $500 million through dollar bonds, becoming the first Indian company to raise funds in the dollar bond market since covid-19.
UPL's fundraising efforts could signal that things are looking better for Indian companies as the economy is slowly opens up after over a tow-month lockdown.
"UPL will soon hit the market with a $500 million bond issuance. The money will be used to repay bonds maturing in 2021. The company will also soon launch a tender offer for buying back the 2021 bonds," said a person aware of the development.
UPL is being advised by JP Morgan, UBS, Bank of America and Citi on the transaction, he added.
On Monday, Fitch Ratings said it has assigned a 'BBB-' rating to UPL Corp's proposed US dollar senior unsecured notes, proceeds of which are intended to be used primarily for debt repayment.
Fitch also affirmed Mauritius-based UPL Corporation Limited's (UPL Corp) long-term issuer default rating (IDR) at 'BBB-', with a negative outlook and also affirmed UPL Corp's senior unsecured rating and the ratings on the company's $500 million 3.25% senior unsecured notes due 2021 and $300 million 4.5% senior unsecured notes due 2028, at 'BBB-'.
The rating agency noted that the pandemic has had limited impact on UPL's production as well as market demand.
"UPL's manufacturing facilities in India and overseas continued to operate, albeit at lower utilisation rates, in the last few months despite restrictions to contain the coronavirus pandemic. Management said that utilisation rates fell to 65%-70% in and around April 2020, from 90% or better a year earlier, due to disruptions in supply of raw material and labour. However, rates are close to normal now," the rating agency said in its report.
Product demand in most markets has also been largely unaffected as agricultural activity has continued despite the pandemic, it said.
Spokespersons for UPL, JP Morgan, UBS, Bank of America and Citi could not be immediately reached for a comment.
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