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Vedanta Resources raised $1.1bn via a dual-trancher. It raised $550mn via a 5.5NC2.5 bond at a yield of 9.475%, 40bp inside initial guidance of 9.875% area. It also raised $550mn via a 8.25NC3 bond at a yield of 9.85%, 40bp inside initial guidance of 10.25% area. The senior unsecured notes are rated B2/B, and received orders of over $1.7bn, 4.3x issue size. Vedanta Resources Ltd, Twin Star Holdings Ltd and Welter Trading Ltd are guarantors. Proceeds will be used to refinance its outstanding 2028 and 2026 bonds, related transaction costs and to service other debts. The notes have the following covenants:
The 5.5NC2.5 bond is callable after 2.5 years at par plus 50% of coupon, after 3.5 years at par plus 25% of coupon and post 4.5 years at par. The 8.25NC3 bond is callable after 3 years at par plus 50% of coupon, after 4 years at par plus 25% of coupon and post 5 years at par.
Separately, Vedanta’s creditors will meet on February 18 for a final decision on the company’s plan to split the conglomerate into five businesses. This move aims to simplify its structure and address its parent company, Vedanta Resources’ dollar debt. The proposal was announced in late-2023, and involved separating divisions for aluminum, oil and gas, power, steel, and semiconductors. The semiconductor unit, along with electronics and copper assets, will remain within the original company. The restructuring seeks to boost the group’s overall valuation and improve financial management. Last year, 75% of Vedanta’s secured lenders approved a preliminary version of the plan. The final proposal also requires approval from 75% of creditors in the upcoming meeting, after which it will be presented to shareholders.