Moody’s has Baa2 rating for RIL’s bond issue, plans to raise $5 billion
Baa 2 is ranked second from the bottom in the investment category. According to Moody’s ranking, BAA rating carries limited credit risk
Moody’s BAA2 rating on RIL’s bond issue
Moody’s Investors Service on Tuesday gave a BAA2 rating with a stable outlook to the proposed US dollar-denominated senior unsecured bond of Reliance Industries Limited (RIL). Billionaire businessman Mukesh Ambani’s Reliance Industries Ltd said on January 1 that it would raise up to USD 5 billion through foreign currency-based bonds and use it to repay existing borrowings.
Why got BAA2 rating
In a statement issued by the rating agency, Moody’s analyst Shweta Patodia said, “RIL’s Baa2 rating reflects the company’s size and key market position across diverse businesses, its management’s strong performance track record and our expectation that the Baa2 rating is Its credit metrics will remain strong for the rest of the country.” the amount will be five billion dollars
what is the meaning of rating
Long-term Moody’s rating is done in two parts, one is investment grade and the other is non-investment grade. Investment grade includes those securities in which investments can be made. In this, ranking is given between Triple A (Aaa) to Baa3. Baa 2 is ranked second from the bottom in the investment category. According to Moody’s ranking, BAA rating carries limited credit risk. At the same time, it is considered to be of medium category in investment.
Largest borrowing raised by an Indian company
This bond sale will be the largest such borrowing by an Indian company. Reliance Industries has said that the proceeds from the issuance of these bonds will be used primarily to pay off existing borrowings. The US Treasury standard offering could range from around 110 to 130 basis points, and the 30-year loan offer could range from 130 to 140 basis points. It is estimated that the issue may launch in the next 2 weeks. The company was constantly talking to investors about this, based on the response received from them, this amount has been finalized. The maturity of bonds issued 8 to 10 years ago is in the early months of this year. These bonds can mature in the next 2 to 3 months. It is believed that the company wants to reduce the cost of funding through new bonds or wants to extend the maturity further. The company’s balance sheet is currently very strong and brokerage houses are expecting further growth in the company. Because of this, raising funds for the company will not be difficult.
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