NTPC Limited (NTPC), the largest power generating company in India, priced a US$ 400 million Medium Term Note offering in the international markets on 12th March 2018. This is the ninth offering under the company’s US$ 6 billion Medium Term Note MTN programme since it was set up in 2006, taking the cumulative amount raised under the programme to US $ 3.85 billion.
Having updated the MTN programme in December 2016, NTPC was well positioned to take advantage of a supportive primary credit market and launched a benchmark size, senior, unsecured, fixed rate 10 year bond transaction with an initial price guidance of US Treasuries (UST) plus 180 bps area on 12th March (Asia open). The offering was met with strong demand and the transaction was oversubscribed within 4 hours of bookbuilding. At Asia close, the guidance was subsequently revised to T+170 bps. The final orderbook was over US$ 750 million, an oversubscription of nearly 1.5 times, with orders from more than 60 accounts. The bonds were finally priced at UST+170 bps with the coupon fixed at 4.50% p.a.
In terms of geographical distribution, Asia took the bulk of the transaction at 79%, with supplemental demand from Europe, Middle East & Africa (EMEA) and offshore US accounts at 18% and 3% respectively. Distribution by investor type was well diversified as Funds Managers took 46% of the transaction, followed by Insurance 36%, Public Sector 12%, and Banks 6%.
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 & renovation and modernization of power stations.
Axis Bank, Barclays Bank, MUFG and Standard Chartered Bank were the bookrunners on the offering.