IOC eyes $500m offshore bond, to pick iBanker soon
New Delhi   22-Jun-2011


P K Goyal

IndianOil (IOC) is looking to raise at least $500 million through an offshore issue of 10-year bonds to fund its Paradip refinery project, a senior company official said.

Eight banks were due to submit proposals on Tuesday for the benchmark size Reg S/144a US dollar bond issue, of which three banks were expected to be mandated by the end of this week, IOC's finance director, Praveen Kumar Goyal, said. The company is raising the money to address its asset-liability mismatch, he said.

“We have decided to borrow long term money this time after borrowing 5-year money till now because as of today most of our repayments fall due in 2015-16,“ Goyal said.

Should the deal materialise, it will mark IndianOil's return to the dollar bond markets after more than a year. The company raised $500 million in January 2010 by selling 5-year bonds at a spread of 205 basis points over mid-swaps. Deutsche Bank, HSBC and Standard Chartered Bank handled that deal.