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Bond Market News
Adani Dollar Bond Issuance Scrapped; Dollar Bonds Drop
November 21, 2024
Adani units’ $600mn 20Y bond offering was scrapped after press releases from the DoJ and the SEC relating to the promoter of the parent company. The $600mn senior secured note was more than three times oversubscribed, as per Bloomberg, with a final yield of 7.45%. The deal was originally marketed in October but was deferred until after the US elections on account of weak market conditions.
As per a statement by the US Attorney’s Office, Eastern District of New York, a five-count indictment was announced against a number of senior executives of the sponsor company. The statement focused on a number of counts including securities, wire fraud and a bribery scheme regarding solar energy supply contracts and capital raising activities from US and international investors. The statement alleged that the scheme concerned an agreement between 2020 and 2024 to pay over $250mn in bribes to Indian government officials. It stated that the bribery scheme for the solar energy contracts came with a projection to “generate more than $2 billion in profits after tax over an approximately 20-year period”. Further, the statement alleged that the company and certain of its subsidiaries raised capital on the “basis of false and misleading statements” regarding (a) two dollar-denominated syndicate loans totaling more than $2bn from lender groups comprising international financial institutions and US-based investors (b) two 144A bond offerings for over $1bn which were marketed and sold to investors in the US and other places. Bloomberg notes that the prosecution would take months, if not years, essentially falling under the incoming Trump administration’s Justice Department to determine how to proceed.
Adani group companies’ dollar bonds were trading weaker by about 3-6 points.
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