UPL looking to raise $500 million though dollar bond issuance

Agrochemicals major UPL Ltd is planning to raise $500 million through a dollar bond issuance, which will make it the first Indian private sector firm to tap the dollar bond market since covid-19 disrupted businesses in March.

“UPL will soon hit the market with a $500 million bond issuance. The money will be used to repay bonds maturing in 2021. It will also launch a tender offer for buying back the 2021 bonds," said a person aware, requesting anonymity. UPL is being advised by JPMorgan, UBS, Bank of America (BofA) and Citi, he added.

Email queries to UPL did not elicit any response. UBS, BofA, Citi and JPMorgan declined to comment.

Since February, no private company from India has raised funds from the dollar bond market, while Adani Electricity Mumbai and non-bank lender IIFL Finance used this route. Last month, state-run REC Ltd had raised $500 million through dollar bonds, becoming the first domestic company to do so since the coronavirus outbreak.

Indian companies had raised several billions through dollar bonds in January and February, following a six-year-high dollar bond fundraising spree of over $21 billion in 2019. But, covid-19 had sharply squeezed this activity since March.

UPL’s fundraising efforts signals that things are starting to look better for Indian companies as the economy opens up slowly after an extended lockdown.

On Monday, Fitch Ratings said it has assigned a ‘BBB-’ rating to UPL Corp.’s proposed US dollar senior unsecured notes, proceeds of which were intended to be used to repay debt. Fitch said it has affirmed Mauritius-based UPL Corp. Ltd’s (UPL Corp.) long-term issuer default rating (IDR) at ‘BBB-’, with a negative outlook, besides affirming UPL Corp.’s senior unsecured rating and the ratings on the company’s $500 million 3.25% senior unsecured notes due in 2021 and $300 million 4.5% senior unsecured notes due in 2028, at ‘BBB-’.

Fitch Ratings also said that the pandemic had limited impact on UPL’s production as well as market demand.