Adani Ports and Special Economic Zone Ltd (‘APSEZ’), the transport and logistics segment of the diversified Adani portfolio, effectively priced a USD 750 million senior unsecured USD notes issuance with 20 years and 10.5 years tranches at a fixed coupon of 5.0% and 3.8% respectively. The issuances were finalized on July 26th, 2021 and were oversubscribed by over 3 times. APSEZ has continued to get exceedingly strong participation (for its successive bond offerings) from its high-quality real money investors across all geographies.
This issuance sets up the Adani Group as India’s leading issuer with the ability to access international capital markets across all market cycles. APSEZ is the only infrastructure firm in India to successfully raise 20 years money from international markets, an achievement that underscores the strength of the firm’s unique business model and strong fundamentals as well as APSEZ’s commitment to ESG and the UN Sustainability Development Goals. Amidst the Adani portfolio, APSEZ is the third issuer of long
tenor bonds after energy utilities Adani Green Energy Ltd (‘AGEL’) and Adani Transmission Ltd (‘ATL’).
Having issued the long tenor bond in advanced markets, APSEZ has elongated the debt maturity to over 7 years from 6 years. APSEZ’s natural hedge through its foreign currency earnings permits the firm to manage its foreign currency exposure. The issuance has also reconfigured the ratio of APSEZ’s debt from international investors from 69% to 73%.
Mr. Karan Adani, CEO and Whole Time Director of APSEZ, stated, “APSEZ is proud of being India’s first infrastructure company to raise USD 750 Mn. of dual tranche 10.5-year and 20-year unsecured bonds in global capital markets. This issuance reflects the confidence international financial markets have in the fundamentals of the Adani Group’s business model and its ability to execute. It further demonstrates our ability to mobilise global resources commensurate with our long asset life and is a part of our capital management program to lock lower interest rates over an extended tenor and extend debt maturity. The reduced cost of capital will translate into greater capital efficiency as well as enhanced shareholder returns.”
Following this issuance, APSEZ has increased the national bar for issuing long tenor bonds and has established a robust financial foundation that would help continue support the development of large infrastructure assets. The Adani Group’s growth model of building and developing world-class infrastructure assets quickly and thereafter accessing global fiscal markets is unique and unreplicated in India’s business landscape.
The JLMs to the transaction were Axis Bank, Barclays, Citigroup, DBS Bank, Emirates NBD, JP Morgan, Merrill Lynch, Mizuho Securities, MUFG Securities, SMBC Nikko, and Standard Chartered Bank.