A wholly-owned subsidiary of Vedanta Resources is back in the dollar bond market within nine months, with a three-tranche issuance that is primarily being raised to fund its buyback of higher yielding notes, two merchant bankers said on Thursday.
Vedanta Resources Finance II aims to raise funds through six-, eight- and 11-year bonds, with an initial coupon guidance of 7.25%, 7.6250% and 8%, the bankers added.
They requested anonymity as they’re not authorised to speak to media, while the company did not respond to a Reuters e-mail seeking comment.
The bonds will be guaranteed by the parent firm as well as subsidiaries Twin Star Holdings, Welter Trading and Vedanta Holdings Mauritius II. The notes are expected to be rated Ba3/BB–/BB in line with the issuer.
Proceeds will primarily be used to refinance higher yielding debt worth over $2 billion.
The company aims to buyback outstanding $550 million of the 9.475% 2030 bond, $500 million of the 11.25% 2031 paper, $500 million of the 9.125% 2032 bond and $550 million of the 9.85% 2033 notes.
In October, the unit had raised $500 million, selling seven-year dollar bonds at a coupon of 9.1250%, and this is one of the papers that it intends to repurchase.