GMR Hyderabad International Airport to start $300 mn-$350 mn bond issue roadshows

GMR Hyderabad International Airport (GHIAL) will commence roadshows for its $300-350 million dollar bond issue beginning Wednesday in New York, London, Hong Kong and Singapore, sources aware of the matter have confirmed with FE.

“It will be a 144A issue and the tenure of the bond is likely to be 10 years. The issue will be a high yield,” a banker aware of the deal said. A 144A issue is a deal in which US investors can also take part.

Moody’s Investors Service has assigned a first-time corporate family rating of Ba1 to GHIAL. S&P Global Ratings has assigned its ‘BB+’ long-term corporate credit rating to the company.

According to GHIAL’s website, the company is promoted as a joint venture comprising the GMR Group (63%) in partnership with the government of India (13%), the government of Telangana (13%) and Malaysia Airports Holdings Berhad (11%).

Earlier during the year, the company was looking to tap the dollar bond market, but bankers said nothing had materialised.

“The firm is looking to refinance its existing loans. By doing this, it might like to divert the operational cash flows towards capex,” said a foreign banker.

The company’s financial statement points out that as on March 31, 2017 borrowings stood at Rs 1,965.12 crore of which Rs 421.15 crore is a foreign currency loan from banks, `1,228.92 crore account for Rupee term loans from banks and Rs 315.05 crore accounts for loan from government of Telangana.

The company had reported a 71.11% rise in its net profits at Rs 107.80 crore for the first quarter of the current fiscal compared to the same period last year according to the company’s investor presentation. Gross revenues had also risen by 15.22% to Rs 293.60 crore in the first quarter compared to last year.

Domestic passenger traffic grew by 23% to 3.3 million in the first quarter while international passenger traffic grew by give percent to 0.9 million. Total passenger traffic grew by 19% to 4.1 million. GHIAL has an annual passenger capacity of 12 million.

GMR group’s Delhi International Airport had tapped the dollar bond market last year to raise $522.60 million by issuing 10-year bonds at 6.125%.

Foreign currency bond issuances have hit a record high of $11.8 billion this year so far with many firms witnessing a considerable tightening in their spreads.