Delhi International Airport (DIAL) is planning to raise ₹3,550 crore through a 15-year bond issue, according to reports from The Economic Times and people familiar with the matter. The proposed bond issue is expected to be priced at about 9.50%, although the final coupon is yet to be determined and will depend on market conditions and investor demand. The bonds are expected to carry an AA rating and interest will be paid every quarter.
The proceeds will be used to refinance DIAL's existing dollar-denominated notes of $522.6 million that are due this year, along with transaction and hedging costs related to the existing debt and the new bond issue. As reported by The Economic Times, DIAL had raised $522.6 million through 10-year international bonds in October 2016 at a coupon of 6.125%. DIAL is targeting a mid-October pay-in for the proposed issue and plans to finalise investors this month.
DIAL plans to repay the principal in stages from the sixth year, with 5% due each year in years six to 10, 10% in years 11-13, 15% in the 14th year and the remaining 30% in the 15th year. According to The Economic Times, this structured repayment approach provides greater repayment flexibility compared to the existing dollar debt obligations. The initiative is designed to secure long-term funding in rupees while offering improved debt management flexibility.
In a significant regulatory development, SEBI is set to increase the cap on the number of annual debt security ISINs maturing, as reported by The Economic Times. This initiative is designed to alleviate liquidity challenges and refinancing stress faced by Non-Banking Financial Companies (NBFCs) and major corporations. SEBI also recommends exempting ESG debt securities from these limitations and advocates for the removal of mandatory listing on all previous unlisted debt offerings.
