Muthoot Finance raises $450 million from International Bond Markets

Muthoot Finance Ltd — the largest gold loan company in India — has successfully priced a $450 Million Fixed Rate Senior Secured issuance in 144A / Reg S format for a 3 year tenor at 6.125 per cent. MFIN bond transaction marks the first international bond by an NBFC to debut in 144A / Reg S market, allowing it to tap the US investor base in addition to Asia and Europe. The proceeds will be used for permitted purposes including onward lending in accordance with RBI’s ECB Guidelines and other applicable laws.

Speaking on the development MG George Muthoot, Chairman at Muthoot Finance said, “The response from international bond investors to our debut international bond issue once again reiterates the robustness and long track record of our gold loan business and is a recognition of India’s retail credit story. This fund raise will enable us to further diversifying and strengthening our sources of funding. We look forward to strengthening our partnership with global investors.”

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The company engaged with investors during an extensive deal roadshow across Singapore, Hong Kong, London and the US. Backed by strong investor feedback, the transaction was launched with an initial price guidance of 6.375 per cent area. Following a strong order book momentum supported by high-quality real money investors, the company was able to tighten pricing by 25bps to 6.125 per cent.

The final order book was in excess of $1.2 Billion with an oversubscription of more than 2.5x. The transaction witnessed 37 per cent participation from Asia, 28 per cent from Europe & Middle East and 35 per cent from the US with 88 per cent investments from asset managers, 6 per cent from Insurance & Pension Funds and 6 per cent from others. The bonds will be listed on the International Securities Market of the London Stock Exchange.

Earlier this month, Company had obtained issuer rating Long Term rating of ‘BB+’ with ‘Stable’ Outlook by Fitch Ratings, ‘BB’ with ‘Stable’ Outlook by S&P Global Ratings and  ‘Ba2’ Corporate Family Rating with ‘Stable’ Outlook by Moody’s Investor Service. Deutsche Bank and Standard Chartered Bank acted as the Joint Global Coordinators and Joint Book Runners for the issue.