According to reports from The Economic Times, Tata Capital is marketing its second dollar bond issue to raise at least $300 million from investors abroad. The non-banking finance company of the Tata Group is planning to issue U.S. dollar-denominated bonds maturing in three-and-a-half years as a Regulation S transaction open to investors across the world except the US. Depending on market conditions, the company may price the bond and complete the transaction as early as this week, with Standard Chartered, HSBC and MUFG serving as the bankers to the issue.
As reported by The Economic Times, in January 2025, Tata Capital successfully raised $400 million through its debut dollar debt issue with similar maturity at a coupon of 5.3890%. The previous paper was sold at a spread of 92 basis points over Treasury to investors in Asia and Europe. The company is scheduled to use these funds for its on-lending activities, marking its first international fundraising since January 2025 as market conditions were not conducive for most of 2025.
According to The Economic Times, markets are currently stable with weakening oil prices and a calmer geopolitical scenario helping to improve investor sentiment. Brent crude has fallen about 43% from its April peak of $126 per barrel to about $72 per barrel, mainly as tanker traffic gradually attained normalcy in the key Strait of Hormuz transit point after a ceasefire agreement between the US and Iran. The latest issues priced out of India are trading at a six- to eight-basis-point lower yield, indicating positive investor sentiment for the current offering.
In February, Fitch Ratings affirmed Tata Capital's long-term foreign- and local-currency ratings at 'BBB-', in line with India's sovereign rating, underpinned by expectation that parent Tata Sons would provide extraordinary support to the subsidiary in times of need. As per The Economic Times, Tata Capital being an NBFC, money is raw material for them and they will use the funds for on-lending purposes. This represents the company's first international fundraising since January 2025 as market conditions have now improved.
