Delhi Airport plans Rs 3,500 cr bond sale for debt recast
Delhi International Airport (DIAL) is embarking on a financial strategy by issuing bonds worth ₹3,550 crore over a 15-year duration, with the primary goal of refinancing existing dollar debt. This initiative is designed to secure long-term funding in rupees while providing greater repayment flexibility. Anticipated to yield a coupon rate near 9.
Delhi International Airport (DIAL) is set to raise ₹3,550 crore through a 15-year bond issue, according to sources familiar with the matter. The bond's coupon is anticipated to be around 9.50%, but the final rate will be decided based on market conditions and investor demand. The funds raised will be utilized to refinance DIAL's existing dollar-denominated notes worth $522.6 million, which mature this year.
Additionally, the proceeds will cover transaction and hedging costs associated with the current debt and the new bond issuance. In October 2016, DIAL had raised $522.6 million through 10-year international bonds at a coupon rate of 6.125%. By refinancing the maturing dollar debt with long-term rupee funding, DIAL aims to spread repayments over several years and gain flexibility in refinance or redemption options after five years.
The issuance is expected to be priced at AA rating, with interest paid quarterly. DIAL aims to finalize investors this month and intends to conduct the pay-in in mid-October. The repayment structure includes 5% in years six to 10, 10% in 11-13, 15% in the 14th year, and the remaining 30% in the 15th year.
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