Muthoot Finance planning to raise funds using dollar-denominated bonds

India's Muthoot Finance is planning to raise funds through US dollar-denominated bonds maturing in three years and nine months and has provided initial guidance for a coupon of around 7.375 per cent, two bankers said on Tuesday.

These Regulation-S dollar bonds are expected to be priced later in the day or early on Wednesday, the bankers said, declining to be named as they are not authorised to speak to the media.

Muthoot Finance is aiming to issue benchmark-sized bonds, which means the issuance will be around $500 million.

The non-banking finance company will use the proceeds for onward lending and other activities permitted under external commercial borrowing guidelines.

Deutsche Bank and Standard Chartered are the joint global coordinators for this dollar bond issue, as well as joint bookrunners along with DBS Bank and SMBC Nikko.

The bonds are expected to be rated 'Ba2' by Moody's Investor Service and 'BB' by Fitch Ratings and S&P.
Other Indian non-bank lenders such as Manappuram Finance and state-run REC are also looking to raise funds through a dollar bond issue over the next few days.

An increasing number of non-bank firms are seeking to raise funds via overseas borrowings, including bonds and loans, which is likely an outcome of the Reserve Bank of India's push to diversify their borrowing sources, Reuters reported in April.