JSW Steel unit eyes debut $1 billion short-term debt issue, bankers say

MUMBAI: India’s JSW Kalinga Steel (JKSL) is set to tap the corporate debt market with its debut shorter-duration bond issue this week, as it seeks to raise as much as 95 billion rupees ($1.03 billion), two merchant bankers said on Monday.

The company will sell five-year zero-coupon bonds to raise 60 billion rupees at a yield of 8.76%, with a call option at the end of three years. The firm will raise another 35 billion rupees through five-year and one-day bonds, with a call option at the end of four years, the bankers said.

The company has invited bids for both the issues on Wednesday and has hired a few foreign banks to act as arrangers, they added.

“While the first issue is earmarked for foreign investors, most of the top mutual funds have tied up as anchor investors for the second option,” one of the bankers said.

India’s JSW Steel secures coking coal mining project in Mozambique: statement

The bankers requested anonymity as they are not authorized to speak to the media.

JKSL did not immediately reply to a Reuters email seeking comment.

The bonds of the company are rated “AA” by Crisil, and the ratings take into account the expected credit support from JKSL’s two equal joint-venture partners, JSW Steel and Japan-based JFE Steel Corporation, as per Crisil.

JSW Kalinga Steel is a 100% subsidiary of Piombino Steel Ltd, which, in turn, holds a 100% shareholding in JSW Sambalpur Steel Ltd. These entities have been formed to own and operate the steel business undertaking of Bhushan Power & Steel Ltd.