Bengaluru: Vedanta Resources Finance II plc (the “Issuer”), a wholly owned subsidiary of Vedanta Resources Limited (“Vedanta” or the “Company”), announced the successful pricing of the offering of bonds in the aggregate principal amount of US$900 million of 10.875% Bonds due 2029 (the “Bonds”) on September 10, 2024. The Bonds are guaranteed by the Company and other wholly owned indirect subsidiaries of the Company, namely Twin Star Holdings Ltd. (“Twin Star”) and Welter Trading Limited (“Welter”, together with the Company and Twin Star, the “Guarantors”).
The net proceeds from the offering of the Bonds will be used to repay (including by way of tender offers, redemptions, or otherwise) certain of Vedanta’s existing bonds (including any accrued interest thereto) and to pay any related transaction costs in connection thereto.
This is the first U.S. dollar bond issued by Vedanta since February 2021. The bond received final orders of US$1.45 billion from investors across the globe representing a 1.6x+ oversubscription, reinforcing the confidence of these investors in the Vedanta story.
“We are delighted by the overwhelming response to our bond issue. This reflects the significant confidence of global investors in the Vedanta growth story and the quality of our assets, our commitment and track record to deleveraging our balance sheet, strengthening our cash position, striving towards greater operational excellence, and consolidating for growth. Vedanta is confident of continuing to provide market-leading returns to all our global and domestic investors in the years’ ahead.” said Chief Financial Officer – Vedanta.
The final allocation of the bonds represented the broad-based support which Vedanta enjoys, including 41% from Asia, 24% from EMEA and 35% from the United States and a subscription by over 102 investors. It is also noteworthy and heartening to see the interest reduction in the bond (final pricing of 10.875%) as compared to the dollar bond liabilities it would be refinancing, representing an interest saving of 3% p.a. for the Company.
The Bonds are being offered and sold in a private offering to qualified institutional buyers under Rule 144A of the U.S. Securities Act and non-U.S. persons in offshore transactions in reliance on Regulation S under the U.S. Securities Act. The offering is expected to close on September 17, 2024, subject to customary closing conditions. Barclays, Citigroup, Deutsche Bank, J.P. Morgan and Standard Chartered Bank are acting as joint global coordinators and managers.
The Bonds are expected, on the closing date, to be rated “B-” by S&P Global Ratings, a division of S&P Global, Inc.