Future Retail Limited (FRL), one of the leading organised retail players in India has successfully priced a US $500 million Fixed Rate Senior Secured 144A/Reg S Bond for a 5-year (non-call 3-year) tenor at 5.600 percent. FRL’s debut bond transaction also marks the first international bond deal from the retail & consumer sector space in India.
The company embarked on a global deal roadshow covering Singapore, Hong Kong, Los Angeles, New York and London; and also conducted conference calls with investors at other locations (such as Middle East, Boston etc). Backed by extremely strong investor feedback, the transaction was launched with an initial price guidance of 6.000 percent area. Following a strong book build supported by high quality real money investors globally, the Company was able to tighten pricing by 40 bps to 5.60 percent. The final order book was in excess of US $3.0 billion with oversubscription of >6.0x. The transaction witnessed 37 percent participation from Asia, 42 percent from the US and 21 percent from EMEA with 84 percent investment from long haul funds, 8 percent from private banks, 5 percent from insurance/pension funds and 3 percent from banks and others. There has been strong demand from most of the blue chip names amongst the largest funds across the globe.
Deutsche Bank, Standard Chartered Bank, Barclays, J.P. Morgan and UBS acted as Joint Global Coordinators and Joint Bookrunners on the issue. SBICAP, Credit Suisse, Emirates NBD Capital and Rabobank acted as Joint Bookrunners, while A K Capital acted as Financial Advisor to the Issuer.
Rakesh Biyani, Joint Managing Director of FRL, while describing the landmark issuance stated, “We are overwhelmed by the strong response of the global investor community which is a testament to our strong credit story. This transaction would help us further diversify our sources of funding. Proceeds from the offering will be utilized to purchase store assets from Future Enterprises Limited which will help significantly improve EBITDA margin profile of FRL.”