Shriram Finance plans $500 million bond buyback
The company proposes to buy back bonds maturing in April 2027 and April 2028 in an attempt to reduce borrowing costs and the buyback will be offered at a slight premium to the existing trading price, people familiar with the details said. The tender offer will be the first such buyback since MUFG purchased the stake earlier this year.
Mumbai-based Shriram Finance is set to announce a $500 million bond buyback later this week, capitalizing on reduced borrowing costs following a rating upgrade and a strategic investment by Japan's Mitsubishi UFJ Financial Group (MUFG). The company plans to repurchase bonds maturing in April 2027 and April 2028, offering a slight premium over the current market price.
The 2027 bond, with a $750 million outstanding, and the 2028 bond, with a $500 million outstanding, are both trading at a price around $101. By limiting the buyback to $500 million, Shriram aims to generate sufficient demand for the transaction, saving approximately 75 basis points on interest costs.
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