Reliance Ind raises $1.5 bn from dollar bonds

Reliance Industries said it has raised $1.5 billion from its first benchmark sale of bonds denominated in dollars.

Billionaire Mukesh Ambani-run firm sold $1 billion of 10-year notes and $500 million of 30-year bonds, the company said.

Reliance Holding USA Inc, a wholly owned subsidiary of RIL, priced the 10-year notes at 205 basis points, or 2.05 percentage points, more than similar maturity US Treasury note and the 30-year bond at 240 basis points.

The two notes 'will be denominated in dollars, and will bear fixed interest of 4.50 per cent and 6.25 per cent per annum, respectively, with interest payable semi-annually in arrear,' it said.

Reliance Holding will use the net proceeds to refinance existing debt, making other business investments and for general corporate purposes.

It had taken $765 million loan to purchase shale-gas properties in the US. Company's chief financial officer Alok Agarwal said: "I am delighted with the outcome of this offering. It is truly a global benchmark supported by high quality accounts that believe in Reliance's credit and value creation story."

Banc of America Securities LLC, Citigroup Global Markets Inc, The Hongkong and Shanghai Banking Corp and The Royal Bank of Scotland plc acted as joint book runners and lead managers.

"The transaction priced through global comparables and was nearly 7.8 times oversubscribed with an order book aggregating $11.6 billion," the company said.

This is Reliance's first return to the global markets since its last dollar issuance in 1997 and its largest ever public market offshore bond offering.

"In terms of geographic distribution, the (10-year) 2020 Notes were distributed 25 per cent in Asia, 21 per cent in Europe and 54 per cent in the United States, while the (30-year) 2040 Notes were distributed 27 per cent in Asia, 18 per cent in Europe and 55 per cent in the United States," the release said.

The Notes were distributed to high quality fixed income accounts: the 2020 Notes were distributed 53 per cent to asset managers, 22 per cent to hedge funds, 10 per cent to banks and private banks and 15 per cent to insurance and pension funds, while the 2040 Notes were distributed 58 per cent to asset managers, 22 per cent to hedge funds, 10 per cent to banks and private banks, and 10 per cent to insurance and pension funds.