2 hrs ago
Sun Pharma Plans $1 Billion Bond Sale for Acquisition Loan
Sun Pharma wants to borrow money by selling bonds in India.
It plans to raise about Rs 10,000 crore, or $1.04 billion.
The company would use some of this money to repay a large temporary loan.
That temporary loan helped pay for its purchase of Organon & Co.
The Organon deal was worth $11.75 billion.
The new bonds may last for two, three, or four years.
Banks say borrowing in dollars has become more expensive because United States Treasury yields are high.
Indian companies are therefore using local bond markets more often.
Sun Pharmaceutical Industries plans to raise about Rs 10,000 crore, or $1.04 billion, through domestic rupee-denominated bonds.
The funds would partly repay an 18-month bridge loan used to finance Sun Pharma’s $11.75 billion acquisition of Organon & Co.
The proposed bonds are expected to mature in two, three, and four years, according to sources cited by Reuters.
State Bank of India was among the lenders participating in the bridge-loan financing.
The fundraising comes as higher United States Treasury yields make dollar borrowing more expensive and Indian companies increasingly use domestic debt markets.
- Who
- Sun Pharmaceutical Industries, with State Bank of India among the lenders involved in the earlier bridge loan.
- What
- A planned domestic bond sale of about Rs 10,000 crore, or $1.04 billion, to partly refinance the bridge loan used for the Organon acquisition.
- Where
- India’s domestic debt market.
- When
- The planned fundraising follows the closure earlier this year of syndication for the nearly $12 billion, 18-month bridge loan; additional rupee debt issues were expected over the next few days.
- Why
- To partly repay the acquisition bridge loan while taking advantage of domestic borrowing as dollar-denominated financing becomes more expensive.
Key facts
- Planned fundraising
- Around Rs 10,000 crore, equivalent to about $1.04 billion
- Borrowing instrument
- Rupee-denominated domestic bonds
- Intended use
- Partial repayment of the bridge loan for the Organon acquisition
- Acquisition value
- $11.75 billion
- Bridge loan
- Nearly $12 billion with an 18-month maturity
- Proposed maturities
- Two, three, and four years
- Market context
- The 10-year United States Treasury yield was near its highest level since June 2007
- India debt issuance outlook
- Bankers expect domestic corporate debt issuance to reach a record level this year
Sources
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