Despite rising interest rates in the dollar-bond market that has been keeping away domestic corporations from tapping overseas debt market so far in this year, state-run refiner HPCL has hit the same with a USD500 million issue.
“Hindustan Petroleum is in the dollar-bond market with a benchmark issue. The refiner is likely to raise USD 500 million dollar money,” i-banking sources told.
The third largest state-run refiner could not be contacted immediately for comments.
The Reg S issue (which means the instrument cannot be sold to resident American investors) will be closed tonight or tomorrow, they said, adding the post-issuance, same will be listed on the Singapore Exchange.
Meanwhile, Moody’s Investors Service has assigned a Baa3 rating to the unsecured bonds issuance by HPCL. The agency has also given a postive outlook on the rating.
“The bonds will be the senior unsecured obligation of HPCL and as such are rated at par with its long-term issuer ratings. Although there is secured debt in its capital structure and the bonds will be subordinated to such debt, the amount of secured debt is 22 per cent of its total debt and 6 per cent of the total assets of the state-run corporation.
“As such the risks of legal subordination is low,” Vikas Halan, a vice-president and senior credit officer at Moody’s said in a late evening note.
Though the purpose of this round of fund raising is not known immediately, it could be for its proposed to reported plans to buy the stake in Russia’s oil fields along with Indian Oil Corporation, Oil India, and BPRL.
HPCL has joined a domestic consortium eyeing to snap up 49 per cent stake in Russia’s Vankor Cluster oil fields in the Arctic Region. The fields are owned by Rosneft, the Russian national oil company.
The asset includes the Suzunskoye, Tagulskoye and Lodochnoye oil fields, for which ONGC Videsh had originally signed an agreement to buy a stake. Later, IndianOil, Oil India and Bharat PetroResources came in.
Already the consortium owns 23.9 per cent stake in the field that pumps out 6.56 million tonnes oil and for which it paid Rs 12,900 crore.
There were also reports that the HPCL would soon be tapping the markets to raise Rs 27,000 crore in debt to start work on its fund upcoming 9 million tonnes per annum Rs 43,129 crore project Rajasthan refinery in which it owns 75 percent.
HPCL scrips closed nearly 2 per cent up at Rs 512.40 on the BSE whose benchmark slipped 0.4 per cent. BEN NP