ONGC Videsh Raises $2.2B to Refinance its Rovuma Area 1 Acquisitions

ONGC Videsh Limited (ONGC Videsh), the wholly-owned subsidiary of Oil and Natural Gas Corporation Ltd., announced Tuesday that it has priced $1.5 billion and €525 million unsecured bonds in the international capital markets (Bonds). These Bonds are guaranteed by ONGC. The Reg S Bonds will be issued in dual currency with two tranches of $750 million each for 5-year and 10-year tenors respectively and one tranche of €525 million for 7 year tenor. The Bonds are rated Baa2 by Moody’s and BBB- by S&P.

The transaction is the largest ever Reg S bond deal from India to date. It was also the maiden offering by ONGC Videsh in the Euro bond markets. The offering was oversubscribed approximately 4.5 times in USD and 3.6 times in Euro.

ONGC Videsh conducted a series of investors’ meetings in key financials centers of Europe (Amsterdam, Paris and Frankfurt & London) and Asia (Hong Kong & Singapore) with two teams beginning July 1. The deal roadshows were successful with over 150 investors’ meetings across 3 days. Over 500 investors participated in the landmark Bond Issue.

The 5-year USD Bonds were priced at T+ 160 bps bearing a fixed coupon of 3.250 percent per annum, equivalent to a price of 99.598 and a yield of 3.338 percent and the 10-year bond were priced at T+207.5 bps bearing a fixed coupon of 4.625 percent per annum, equivalent to a price of 99.454 and a yield of 4.694 percent. The 7-year Euro Bonds were priced at Euro MS+180 bps bearing a fixed coupon of 2.750 percent per annum, equivalent to a price of 99.623 and a yield of 2.810 percent. ONGC Videsh intends to use the Bond proceeds to refinance its bridge loans availed for the recently concluded acquisitions of 16 percent stake in Rovuma Area 1, Offshore Mozambique.

The bonds saw a large geographic spread, with interested investors from Europe, US and Asia. The Investors’ base are Fund Managers, Banks, Private Banks and Insurance/Pension funds.

BNP Paribas, Citigroup, DB, RBS and Standard Chartered acted as joint bookrunners and lead managers for this Issue.


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