Indian state-run telcos MTNL, BSNL line up $2.34 bln debt sales

Mahanagar Telephone Nigam

01/11/2022 07:23

By Bhakti Tambe and Dharamraj Dhutia
       MUMBAI, Nov 1 (Reuters) - Indian corporate bond market
participants are braced for a heavy supply of
government-guaranteed bonds over the next few weeks, as
state-run telecom giants MTNL and BSNL aim to raise $2.34
billion, three merchant bankers said.
    Mahanagar Telephone Nigam Ltd  MTNL.NS  and Bharat Sanchar
Nigam Ltd  BSNL.NS  intend to raise an aggregate of 193.56
billion Indian rupees through government-guaranteed bonds, the
bankers said.
    MTNL plans to raise 109.10 billion rupees in November. It is
set to seek bids next week and will meet bankers and investors
on Tuesday, according to the bankers.
    The telecom company is looking to issue bonds maturing in 10
years and will pay a semi-annual coupon, similar to how central
government bonds are priced.
    MTNL and BSNL both received the sovereign guarantee to raise
109.10 billion rupees and 84.46 billion rupees, respectively, in
the current financial year, the government said in September.
    Despite the guarantee, the spread over sovereign bonds may
widen this time.
    "The companies may have to pay a higher yield this time as
the market is not that favourable," said one of the bankers,
adding that the companies are being advised to spread out the
borrowing.
    MTNL had said in August that it plans to issue sovereign
guarantee bonds worth 175.770 billion rupees and would use the
proceeds to service older bonds and bank loans.
    The last time MTNL tapped the bond market was in
October-December 2020, when it raised an aggregate of around 65
billion rupees through two 10-year government-guaranteed bond
issuances at a semi-annual coupon of 6.85% and 7.05%.
    Meanwhile, BSNL may also launch a 10-year bond issuance at
the end of November or in early December, bankers said.
    The company had raised 85 billion rupees through 10-year
bonds at a semi-annual coupon of 6.79% in September 2020.
 
 ($1 = 82.6850 Indian rupees)
 (Reporting by Bhakti Tambe and Dharamraj Dhutia; Editing by
Savio D'Souza)
 ((Dharamrajlalit.dhutia@tr.com))