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Vedanta Resources Latest Bond Receives More Than $1.9 Bn of Bids

Mining giant Vedanta Resources Ltd. was able to secure much-needed funds by selling $1.9 billion of notes at one of the highest yields for a dollar bond in Asia this year.
The company priced the January 2024 bond on Wednesday at a yield of 13.875 percent. Vedanta Resources plans to use the money to finance a buyback offer for $670 million of notes maturing in June 2021.
Vedanta Ltd. managed to price a larger offering than expected, albeit at a high yield,’ Trung Nguyen, a senior credit analyst at Lucror Analytics Pte., wrote in an investor note. Importantly, the deal showed the company can access debt capital markets, as there was doubt about that given high yields on outstanding notes, he wrote.
The bond sale only partly allays debt concerns about the company, which faces about $650 million of bank loan repayments by March 2021, Vishal Kulkarni, an analyst at Nomura International HK Ltd, wrote in a note. Vedanta Resources also has a $1 billion bond due July 2022.
Pricing on the note sold Wednesday tightened from initial guidance of about 14.5 percent. In the terms of this week’s sale, the company also agreed to conditions that include debt limits at subsidiary guarantors of the note, Twin Star Holdings Ltd. and Welter Trading Ltd.
Vedanta Resources’s latest bond received more than $1.9 billion of bids, with asset managers taking up most of it. About 57 percent of the total orders were placed from the Asia Pacific.

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