New USD Issue : Tata Steel Dual Tranche 5.5Y and 10Y

TATA STEEL DUAL TRANCHE US$ REGS 5.5YR & 10YR

Issuer:  ABJA Investment Co. Pte. Ltd
Guarantor: Tata Steel Limited
Issue: Fixed Rate Senior Unsecured Notes
Guarantor Rating:   Ba3 (Moody’s) / BB (S&P) / BB+ (Fitch)
Expected Issue Rtg: BB (S&P) / BB+ (Fitch)
Format:  Registered, Regulation S only
Tenor: 5.5 Year      |     10 Year
Price Target :  Low to mid 5% | Low to mid 6%
Issue Size: US$ Benchmark
Change of Control:  At 101% for Put Event
UOP: To fund pre-payment, repayment or refinancing of the Group’s offshore debt obligations and for general corporate purposes outside India
Clearing:  Euroclear and Clearstream
Denoms:  USD200k x 1k
Governing Law:      English Law
Listing:  Frankfurt Stock Exchange (Open Market)
Timing:             This week’s business

TATA IS BACK ! And meaner than before.

We saw Tata Steel hit Singapore shores back in April last year, their first corporate bond issue outside of India, excusing a US convertible issue done in 2009.

My post on Tata last year : https://tradehaven.net/market/new-issue-review-tata-steel-10y-sgd-raffles-education-5y/

To be honest, I felt highly insulted then because Tata had announced a roadshow to raise up to 1 bio through international bonds and ended up only suckering Singapore into a deal and to add insult to injury, the bonds tanked to a low of 80 cts to the dollar right after issuance.

CHART OF TATA STEEL SGD 4.95% 05/2023 BOND PRICE

TATA STEEL SGD BOND PRICE

Bond price still under water right now at 95.90/96.20 (5.54/5.5%). A lot better off than 82 cts (7.61%), when I highlighted that it looked good in the Forum page 1 (4 Sep 2013).

This is averaging at a credit premium of over 3% for the 9 years left in the paper. The new  USD10 year, if it comes in at 6.5%, would be a credit premium of 3.9% over the 10 year interest rates.

And to think that they failed to issue in USD at 9.5% for 10 years last year ?

What do I say to buyers ?

SERVE YOU  RIGHT.