Mumbai: Yields on outstanding dollar bonds of the Adani Group climbed 2-10 basis points Friday in signs of relative stability a day after the conglomerate detailed its deleveraging plans that include refinancing blueprints for debt maturing next year and reduction in discretionary capital expenditure. A basis point is 0.01 percentage point.
Adani Green Energy’s 4.375% $750-million bond due September 2024, which is the “most mispriced and volatile” bond according to the conglomerate’s management, was up 10 basis points, said a bond dealer. Similarly, the bonds of Adani Electricity Mumbai were trading at yields 2-5 basis-point higher, said another dealer. “Adani bonds have been plunging since January 25; however, the recent assurance by the key officials has calmed wary investors,” said an investor.
The Adani management had told investors during an analyst call Thursday evening that it will refinance two dollar denominated bonds due in 2024 one year ahead of maturity and prepay $390 million loan at Adani Transmission Step-one through cash to address the near-term maturities.
On the debt deleveraging plan, Adani will seek to cut net debt to EBITDA (operating profit) below a multiple of three times from 3.2x at present. The management will have the full finance plan in place by June end.
Global bond investors were waiting for Adani to announce refinancing plans of upcoming maturities and its debt deleveraging roadmap after it scrapped the follow-on share sale at its group flagship.
During a call with investors in early February, Goldman Sachs’ trading desk had said that there was increasing interest from distressed funds in the US to buy bonds of Adani Ports, Adani Transmission, Adani Electricity Mumbai and Adani Green Energy.
Adani stocks had a mixed day on a rather uneventful Friday on Dalal Street. While six stocks climbed, four others ended in the red, with two of them declining about 5%.
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