Tata Power, India's largest private sector power player has launched $200 million through foreign currency convertible bonds to fund its expansion plans.
The five-year FCCB issue carries a 1 per cent coupon. The company is also planning to list these bonds on the Singapore Stock Exchange.
The bonds are convertible at 50 per cent premium over Wednesday's closing share price and bear a yield to maturity of 3.88 per cent compounded semi-annually.
These Bonds are expected to be listed on the Singapore Stock Exchange.
Tata Power intends to use the aggregate net proceeds from this issue for capital expenditure in existing units, new projects and acquisitions, Tata Power said in a media statement. J P Morgan acted as Sole Bookrunner for a $200 million Convertible Bond offering for Tata Power Company Limited.
Of the six equity-linked deals done by the Tata Group of Companies, this is the second to be executed on a Sole Bookrunner basis.
Vedika Bhandarkar, head of investment banking at J P Morgan said, "JPMorgan successfully capitalized on an excellent client relationship at the Group level by offering sound advice, maintaining a consistent & accurate view on pricing, ability to execute on an accelerated basis and willingness to commit capital."
J P Morgan executed the deal on an accelerated basis (30 hours from being mandated), helping Tata Power to capitalize on a 12 per cent rally in the share price over the previous two weeks, a credit rating upgrade for India as well as the company and a positive market sentiment globally, a senior JP Morgan official said.
The five-year maturity bonds bear a coupon of 1 per cent , are convertible at a 50 per cent premium to the closing price on February 8 and yield a total of 3.88 per cent per annum.
Market sources said that equity-linked markets are robust, providing issuers with a very attractive financing opportunity. Asian issuers have raised $1.5 billion in the equity-linked markets in 2005YTD with approximately half of that being raised by Indian issuers.
