This will be among the largest fund-raising exercises that the group will be undertaking after N Chandrasekaran took over as Tata Sons chairman in February last year. Apart from the bonds, which will have a tenure of five, seven and 10 years, Tata Steel will also refinance $1.1-1.5 billion of loans housed in its Singapore subsidiaries, TS Global Holdings Pte. and NatSteel Asia Pte, for another six years, said the people. The loans were last refinanced in 2015 and are expected to carry a pricing of Libor+250 basis points or 4.5%. A basis point is 0.01percentage point.
“Roadshows for the bonds begin on Monday. The management will meet investors in Dubai, London, Singapore and Hong Kong,” said a company executive on condition of anonymity. “The plan is to price them on January 18.”
Over a dozen global banks have been mandated for the issue and are said to include BofA Merrill Lynch, JPMorgan, Morgan Stanley, Citi, StanChart, Barclays, HSBC, UBS and BNP Paribas.
The bonds will be based on letters of comfort from Tata Steel India and not corporate guarantees, said the people cited above. Tata Steel didn’t respond to queries. “At the beginning of the year, many global investors are likely to come with fresh allocations for emerging markets. We are trying to tap that pool of money along with traditional ones,” said a person involved in the process.