Mumbai,15/01/2025: Vedanta Resources Ltd. (VRL) plans to raise $1 billion by issuing two sets of bonds. The money will be used to refinance high-interest bonds that are due in 2026 and 2028. The bonds have attracted strong investor interest, with orders totaling over $3.4 billion. The deal is expected to settle by January 24, 2025.
The bonds include one that lasts 5.5 years at an interest rate of 9.475% and another that lasts 8.25 years at 9.85%. These rates are considered good in the current market. The bonds also include certain rules to maintain financial discipline, with guarantees from Vedanta’s subsidiaries.
This fundraising is part of Vedanta’s effort to reduce borrowing costs. The company recently secured a loan with a lower interest rate than its older bonds, saving $35 million annually. Currently, VRL has $5.55 billion in total debt, with some maturing by August 2025.
The company is timing its bond issue well, as January typically sees less market activity. The funds will help pay off bonds due in 2026 and 2028. By refinancing, Vedanta aims to improve its financial position and reduce future borrowing costs as it faces larger debt payments in the coming years.
