Capri Global taps dollar market with debut debt issue after banks hit pause

Capri Global Capital plans to issue its first dollar-denominated debt, two months after appointing lead managers, according to two merchant bankers. The non-banking financial company aims to raise between $300 million and $500 million through 3-year-and-3-month bonds, with an initial price guidance of around 7.75 percent, the bankers said, declining to comment to the media.

As banks have largely halted their dollar-raising efforts, other firms may now consider tapping the market, especially those who have completed initial work, one banker noted. In June, Capri Global Capital had appointed bankers and held investor calls but decided not to proceed with the issuance due to less favorable pricing and competition from better-rated Indian lenders.

Fitch Ratings has anticipated a BB-(EXP) credit rating for the proposed dollar-denominated senior secured bonds. The issuance will be part of Capri Global's global medium-term note program, with a cap of $1 billion. The company's Managing Director, Rajesh Sharma, had previously stated that the firm intends to boost capital market borrowings on its balance sheet.

This move follows Indian lenders raising a combined $12.15 billion in dollar bonds during June-August under the Reserve Bank of India's discounted swap window. ICICI Bank recently joined the trend, raising $500 million through a private placement at a 5.3080 percent coupon, while the bank leads the fundraising efforts with an aggregate of $3.55 billion raised through a mix of private placement and public issue.

Private sector lenders have dominated the fundraising cycle, accounting for over 75 percent of the funds raised in this period.