INDIAN OIL CORPORATION LTD ISSUES USD BONDS FOR A TENOR OF 10 YEARS…

INDIAN OIL CORPORATION LTD ISSUES USD BONDS FOR A TENOR OF 10 YEARS UNDER REGULATION S FORMAT

New Delhi, July 29 : : Indian Oil Corporation, on 23rd July 2013, priced USD 500 million bonds for a tenor of 10 years under Regulation S format. This was IOC’s fourth international bond in last about three and half years.

During the Federal Open Market Committee on 19th June 2013, it was indicated that US Fed would moderate the asset purchase based on improvement in US economy. These indications were not taken favorably and markets went into sell off mode. Considering the market conditions, IOC realigned its strategy of bond issuance and postponed its investor meetings and pricing from first week of July 2013 to second and third week of July 2013 so that markets could cool off and investors’ appetite for investment could resurface as they needed capital deployment after sell off.

The above strategy worked as after the successful investor meetings in Singapore, Hong Kong and London, IOC priced the bonds aggressively without any new issue premium.

The order book was of about USD 3.5 billion and consisted of orders from over 400 investors and investors’ type included Fund Managers (64%), Banks (17%), Insurance & Sovereign Wealth Funds (11%) and Private Banks (8%). In terms of geography, 73% orders came from Asia, while Europe / Middle East and US Off shore contributed 25% and 2 % respectively.

The overwhelming response to IOC’s bonds has reconfirmed the confidence of international investors in the credit credentials of IOC.