NTPC Limited (NTPC), the largest power generating company in India, priced US$ 450 million 5 Year bond offering in the international markets under its USD 6 billion Medium Term Note (MTN) Programme on 26th March 2019. NTPC’s US$ 6 billion MTN Programme was set up in 2006 and this issuance was the tenth offering under the Programme taking the cumulative amount raised under the MTN Programme to US $ 4.30 billion.
Having updated the MTN Programme in December 2018, NTPC was well positioned to take advantage of a supportive primary credit market and conducted comprehensive deal roadshow covering in Singapore, HongKong and London from 21st – 25th March 2019 to reach out to a vide range of fixed income global investors and to appraise them about companies’ financials and its future plans. Based on the investors feedback, NTPC launched a USD 450 million senior, unsecured, fixed rate Reg-S 5 year bond transaction with an initial price guidance of Current 5Y US Treasuries yields (CT5) plus 185 bps area on 26th March 2019 (Asia open). The offering was met with strong demand from the investors and the order book reached USD 1 billion within the first hour of deal announcement which further increased to USD 2 billion by noon. The order book attained a peak of USD 3 billion and thereafter the price guidance was revised to CT5+155 bps to CT5+160 bps. The final order book was over US$ 1.80 billion, an oversubscription of nearly 4 times, with orders from more than 100 accounts. The bonds were finally priced at CT5+155 bps with a yield of 3.773% and the coupon was fixed at 3.75% p.a.
In terms of geographical distribution, Asia took the bulk of the subscription at 90%, with supplemental demand of 10% from Europe, Middle East & Africa (EMEA) and offshore US accounts. Distribution by investor type was well diversified as Funds Managers took 69% of the subscription, followed by Banks 22%, Insurance/Pension 8% and PB/Others 1%.
With a robust portfolio of projects under execution, the Company intends to use the proceeds of the issue to finance its ongoing and new power projects, coal mining projects, acquisition of power plants & renovation and modernization of power stations.Axis Bank, Mizuho, MUFG, SMBC Nikko and Standard Chartered Bank were the joint lead managers & bookrunners for the offering