Tata Capital raises $400 Million Through its First Dollar-Denominated Bond Issue

Tata Capital Limited, a diversified Non-Banking Finance Company (NBFC), has raised $400 million by issuing its first dollar-denominated bonds in the international market.

This is Tata Capital's first USD bond issuance and the first investment-grade bond issued by a Tata Group company. It is also the first such bond from a private sector NBFC in India.

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The bonds have a 3.5-year term with an interest rate of 5.389%. As a Reg S bond, it does not need to be registered with the US Securities and Exchange Commission.

Commenting on the bond issuance, Rajiv Sabharwal, Managing Director and Chief Executive Officer, Tata Capital, said, “We would like to thank global fixed income investors for the overwhelming support to our debut USD bond issuance. The success of the transaction illustrates the confidence of investors in Tata Capital’s strong credit profile, backed by its focus on a diversified and granular loan book. The transaction will further strengthen our liability profile and diversify our funding sources.”

Tata Capital reached out to global investors in Hong Kong, Singapore, and London. Due to strong interest, they initially set the bond price at UST + 125 bps. After receiving even more demand, the company was able to reduce the price by 33 bps to UST + 92 bps. (One basis point is 0.01%.)

This is the narrowest spread over US Treasuries ever achieved for a 3/3.5-year USD bond issued by a BBB- rated company from South and Southeast Asia.

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The bond was highly popular, with demand more than four times the available amount. Investors from Asia and EMEA, including asset managers, insurance companies, and banks, all participated in the deal.

BNP Paribas, HSBC, Standard Chartered Bank, and MUFG worked as Joint Global Coordinators and Bookrunners, while J.P. Morgan also served as a Joint Bookrunner for this deal.

About Tata Capital Limited

Tata Capital Limited is a subsidiary of Tata Sons Limited. It is registered with the Reserve Bank of India as a Core Investment Company and provides financial services, including fund and fee-based services, under the Tata Capital brand.

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