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    UPL Corp likely to raise $400 mn via overseas bonds

    Synopsis

    Perpetual bonds have no fixed maturity. Bharti Airtel raised $1 billion in two tranches in past few months.

    Bonds---AgenciesAgencies
    ADIA-backed UPL Corporation, a Mauritius-based subsidiary of UPL India, is raising about $400 million via its maiden perpetual offshore bonds, a quasi-equity instrument, as it seeks repay its existing debt, people familiar with the matter told ET.

    The proceeds would be used to pay off a bridge loan taken to acquire Arysta LifeScience, said one of the persons cited above. Bonds may offer 5.35-5.45 percent with five-year call option, an exit route for investors. The issue will likely open for subscriptions next 10 days.

    Email sent to UPL at a short notice remained unanswered until publication of this article.

    Perpetual bonds have no fixed maturity. Bharti Airtel raised $1 billion in two tranches in past few months.

    Globally yield-hungry investors are scouting for investment opportunities. With scare of coronavirus spreading, China is shut for business chocking issuances from the country that forms nearly three-fourth of the Asian bond sales.

    Bank of America, MUFG Bank and JP Morgan are among the bankers helping the agriculture chemical company to raise the money.

    “The company was planning the issuance towards end of financial year but sudden overseas investor exuberance prompted it do earlier,” said an executive involved in the exercise.

    Non-banking finance company IIFL Finance obtained five times higher bids raising $300 million.

    The company may make formal announcement on the proposed fund raising Friday. Next week, roadshows are likely to begin in UK, US and Europe.

    A few weeks ago leading agrochemical company, UPL completed of its acquisition of Arysta LifeScience (Arysta) from Platform Specialty Products for USD 4.2 billion.

    The completion of the transaction, which was signed in July 2018, would further strengthens UPL's position as a global leader in agricultural solutions, with about USD 5 billion in combined sales and annual growth of around USD 1 billion, according to a company release.

    Sovereign wealth fund ADIA and global alternative asset company TPG partnered UPL Corp’s acquisition of Arysta.

    Globally sovereign papers worth of $13 trillion are yielding negative returns. This means, investors have to pay for the privilege of owning those debt securities.

    Moody's Investors Service changed the outlook on UPL Corporation Limited's ("UPL Corp") ratings to stable from positive on November 25 last year. Moody's graded the company’s credit rating at Baa3.

    "The change in outlook to stable from positive reflects the weaker than expected operating performance of the broader UPL Group,” Moody’s said in a release.

    “Our expectation that it will take longer for its credit metrics to improve to a level appropriate for a higher rating."



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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