Adani Ports to buy back another US$195 million of 2024 bond
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ADANI Ports and Special Economic Zone will buy back as much as US$195 million of its 2024 bond, as the Indian conglomerate backed by billionaire Gautam Adani seeks to move on from the allegations levied by a US shortseller.
The 3.375 per cent notes jumped the most since April on news the company would pay US$975 for every US$1,000 in principal for debt tendered by Oct 11. Thereafter, the offer price drops to US$965 per US$1,000, it said on Wednesday (Sep 27).
Adani Ports said it would fund the purchase from its cash reserves and said the bond in question has US$520 million in principal outstanding.
The Adani group has been trying to rebuild investor confidence in recent months after a shortseller Hindenburg Research report alleging malfeasance caused a sell-off in its bonds and shares. Adani officials have repeatedly denied the allegations.
Having plunged as low as 85.8 US cents on the US dollar in February after Hindenburg published its allegations, the 2024 notes have recovered and were trading at 96.4 US cents on the US dollar on Wednesday, Bloomberg-compiled data show. The buyback offer constitutes a slight premium to the current price.
Bond buybacks allow companies to repurchase debt through tender offers to bondholders, enabling them to retire some or all of the securities ahead of their due date.
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The announcement marks the Indian firm’s second tender offer for its 2024 notes in just a few months. It intends to continue repurchasing notes in the coming quarters.
Adani’s announcement bucks the global trend. After interest rates rose sharply, companies have been repurchasing less debt. Keeping bonds with lower coupons for longer means they do not have to take out more expensive new debt instead.
The Adani tender offer expires at 5.00 pm in New York on Oct 26. BLOOMBERG
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