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
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.
Unfortunately human memory is short… Looking like it is going to be a hot deal…
Yes. Modi rules ! India rules ! And I am glad Tata SGD 4.95% is finally back in business.
TH, do u have insights on the Sino-Ocean Land that came out yesterday as well?
Hi RedBaron,
Bonds were heavily oversubcribed. Investors liked the idea of the change of control clause for China Life and Nan Fung Group stakes.
Sino Ocean Land 4.625% 07/2019 current price 99.65/99.75
Sino Ocean Land 6% 07/2024 current price 100.00/100.20
The bonds are rated Baa3/BBB- so 2 notches above Country Garden.
Sino Ocean perp callable in 05/2016 is going at 4.8% yield.
It is a tier 1 name, top 10 biggest property group and thus, deemed safe.
Thanks. Got a pc today.
TATA STEEL DUAL TRANCHE US$ REGS 5.5YR & 10YR: EUROPE UPDATE
** NEW US$ 5.5YR AND 10YR ANNOUNCED YESTERDAY
** BOOKS WELL IN EXCESS OF US$4.5BN
** INITIAL PRICE GUIDANCE:
5.5YR : 5.125% AREA
10 YR : 6.25% AREA
** ISSUE SIZE: REGS BENCHMARK
** TIMING: EUROPEAN BOOKS SUBJECT AT 9:30AM UKT / 10:30AM CET AS EARLY AS TODAY’S BUSINESS
TATA STEEL DUAL TRANCHE US$ REGS 5.5YR & 10YR
BOOK IN EXCESS OF US$11BN ACROSS BOTH TRANCHES
FINAL PRICE GUIDANCE:
5.5YR : 4.90% Area (+/-5 bps; will price in range)
10 YR : 6.00% Area (+/-5 bps; will price in range)
ISSUE SIZE: REGS BENCHMARK
TIMING: AS EARLY AS TODAY