IndianOil issues foreign currency bonds to fund capex

Indian Oil Corporation Limited (IndianOil) has executed documentation to issue long-term foreign currency bonds of US$ 300 million (over Rs.1200 crore) raised through a private placement of debt securities in the United States. The Note Purchase Agreement for this issue was signed by Mr. S.V. Narasimhan, Director (Finance), IndianOil, on May 31, 2007 at New York.

The bond was issued at a highly competitive fixed rate of interest on an unsecured basis and had an average maturity of approximately 10 years. The proceeds shall be utilised to fund capital expenditure requirements for the fiscal 2007-08. Banc of America Securities LLC, USA, and Citigroup Global Capital Markets, USA, were the Joint Placement Agents for the bond issue.

IndianOil launched its US$ 200 million issue in April 2007 and, subsequent to extensive road show in the US, an overwhelming response was received from investors that enabled the transaction to be increased to US$ 300 million. Thirteen investors, representing a broad cross-section of both US as well as international financial institutions, participated in the issue. For some investors, this opportunity represented their first participation in a private placement for an Indian issuer. This issue also represented IndianOil's first private placement in the offshore capital markets.

IndianOil is India's largest commercial enterprise with a sales turnover of Rs. 2,20,779 crore (over USD 50 billion) for the financial year 2006-07. It is a diversified, transnational, integrated energy major that plays a major role in India's oil security and public distribution. It ranks 153rd in the Fortune 'Global 500' list f

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