Mumbai: Reliance Industries has hit the international debt market with an aim to raise around USD 1 billion by selling bonds to international investors.
According to market sources, the issuance is the same that the company was planning to raise last month, which was called off after interest rates tightened.
When contacted, an RIL spokesperson refused to comment.
In December, the company had hired as many as 11 i-bankers, including HSBC, Bank of America Merrill Lynch and Standard Chartered, for the issue to raise USD 1 billion debt.
Reliance Industries Ltd (RIL) is the most cash-rich company in the country sitting on a cash pile of Rs 78,691 crore at end of the December quarter, down from Rs 83,456 crore at the end of previous September quarter.
Similarly, its debt rose to Rs 1,50,007 crore from Rs 1,42,084 crore during the same period. In the December quarter, RIL reported its first drop in net profit in nine quarters at Rs 5,256 crore, slipping 4.5 percent due to steep fall in crude prices.
International rating agency Moody's has assigned a Baa2 rating to the proposed bonds.
It can be noted that RIL is one of the most prolific debt raisers in the country with the company having raised USD 3.3 billion in overseas debt in 2014.
RIL issue is the first international bond sale by a domestic corporate this year.
In January 2013, Reliance became the first company from Asia to issue USD 800 million worth of perpetual debt to international investors at a coupon rate of 5.875 percent. A perpetual bond is the one which has no fixed maturity date.
RIL has unveiled an over Rs 1.8 trillion capex plan for the next three years with a good portion of that going into his soon-to-be-launched telecom venture under the brand name Reliance Jio, into which the company has announced a whopping USD 12 billion investment.
In a statement issued from Singapore, Moody's Investors Service today said it has assigned a Baa2 senior unsecured foreign currency debt rating to the proposed issuance by Reliance Industries.
"The outlook on the rating is stable," Moody's said, adding that the company will use the proceeds to fund its capital expenditure.
The proposed bond will rank pari passu with all of RIL's other existing and future unsecured and unsubordinated obligations, Moody's said.
"RIL's Baa2 rating reflects its leading market position, globally competitive refining business, which has consistently commanded higher margins than its competitors, and vertically-integrated operations across the hydrocarbon chain.
"The rating also recognises RIL's moderate financial leverage, strong operating cash flow and excellent liquidity," said Moody's vice-president and senior credit officer Vikas Halan said in a note.
At the same time, he added, the rating incorporates RIL's exposure to the inherent volatility of refining and petrochemical margins, its single location refinery's concentration risk and the execution risk from its diversification into consumer businesses.
He further said the rating also accommodates Moody's expectation that RIL will use its financial flexibility to make growth-enhancing investments that will boost its business and geographical diversification.
"Over the next 12 months, we expect RIL's credit metrics to remain stable, supported by strong earnings contributions from its refining and petrochemical segments even as the company increases its borrowings to partially fund its large Rs 1.8 trillion capex plan," he said.
