Tech Mahindra raises $120 mln via bonds: Bankers
Indian software services group Tech Mahindra, which is waiting for regulatory approval to buy Satyam Computer Services , has raised 6 billion rupees ($120 million) through bonds, two sources said.autos Updated: Apr 15, 2009 11:18 IST
Indian software services group Tech Mahindra, which is waiting for regulatory approval to buy Satyam Computer Services , has raised 6 billion rupees ($120 million) through bonds, two sources said.
Settlement is likely to be on Wednesday and Thursday, and investors include mutual funds and banks, one source with direct knowledge of the deal said.
Tech Mahindra, 31 percent-owned by Britain's BT Group, sold four- and five-year bonds with a coupon rate of 10.25 percent at face value, the source said. The bonds are rated 'AAA' by Indian rating agency CARE.
Top rated five-year corporate bond yields were quoting around 7.89-7.97 percent, according to a note from broker Derivium Capital, and analysts said the pricing was adequate given they presumed the proceeds would be used to fund the Satyam deal and therefore needed to be raised quickly.
Tech Mahindra will pay $351 million for a 31 percent preferential allotment of new shares in Satyam and will make an open offer for a further 20 percent of the fraud-hit company at a cost of up to around $225 million. It is the first time Tech Mahindra has tapped the domestic debt market in 2009. Kotak Mahindra Bank was sole arranger to the Tech Mahindra bond issue.