Yield on SP Co's ₹14,300cr NCDs Surges
Goswami Infratech's NCDs yield surged to 22% due to SP Group's debt raise, linked to SIPL's interest rate, triggering early redemption event, approved for extension until Sept 2024.
The on 's ₹14,300-crore non-convertible () has surged more than three percentage points to 22%, said a notice by to the debenture holders, in line with an initial clause that entitled to greater returns if the Shapoorji Pallonji (SP) Group raised at higher rates.This increase follows the Most Favoured Nation (MFN) testing date, on May 24, aligning the yield on Goswami NCDs with the accruing on facilities supported by Pvt Ltd (SIPL).
The here says that if any company related to the borrows money at a higher interest rate after May 24, 2024, then Goswami Infratech must also offer that higher interest rate to its bondholders.
Goswami Infratech had issued these rupee-denominated zero-coupon NCDs in June 2023, maturing in April 2026, to investors like , , , , Edelweiss, and Ares SSG. These NCDs were subsequently sold to domestic high-net-worth individuals (HNIs) through wealth management funds.
Goswami Infratech's NCDs are secured by group-level monetisation events. These are expected to facilitate debt reduction and lower refinancing requirements. The NCDs are backed by a credit support undertaking from Cyrus Investments Pvt. Ltd., which has pledged its 9% holding in Tata Sons), with another 9% pledged by Sterling Investment Corp.
The SP Group is currently negotiating with state-owned lender PFC to roll over part of the ₹20,000 crore debt it raised through SIPL in 2021 from Ares and Farallon at an initial rate of 22%, which could rise to 28% if not refinanced promptly. This proposed fundraising has triggered the MFN clause in Goswami's NCDs, resulting in an early redemption event. Investors have approved an extension until September 2024.
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Source: Stocks-Markets-Economic Times
