India’s state-run telecom operators MTNL and BSNL provide $2.34 billion in debt sales
MUMBAI (Reuters) – Participants in India’s corporate bond market are preparing to supply it with large amounts of government-guaranteed bonds over the next few weeks, as state telecom giants MTNL and BSNL aim to raise $2.34 billion, three commercial bankers said.
MTNL plans to raise Rs 109.10 crore in November. It is due to seek bids next week and will meet bankers and investors on Tuesday, according to the bankers.
The telecom company is looking to issue bonds that mature in 10 years and will pay a semi-annual coupon, similar to how central government bonds are priced.
The government said in September that MTNL and BSNL each received the sovereign guarantee to raise Rs 109.10 billion and Rs 84.46 billion respectively in the current fiscal year.
Despite the guarantee, the spread on sovereign bonds may widen this time.
“Companies may have to pay a higher yield this time because the market is not favorable,” said one banker, adding that companies are being advised to spread out the borrowing.
MTNL said in August that it plans to issue 175.770 billion rupees of sovereign guarantee bonds and will use the proceeds to service old bonds and bank loans.
The last time MTNL tapped the bond market was in October-December 2020, when it raised a total of around 65 billion rupees through two 10-year government-guaranteed bond issues with a semi-annual coupon of 6.85% and 7.05%.
Meanwhile, BSNL may launch a 10-year bond issue at the end of November or early December, bankers said.
The company raised Rs 85 crore through 10-year bonds with a semi-annual coupon of 6.79% in September 2020. ($1 = INR 82.6850)
(Report) by Bhakti Tambi and Dharamraj Dhotia; Edited by Savio D’Souza
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