India high yield scarcity to drive covenant flexibility

Author: Ashley Lee | Published: 6 Aug 2014

Tata Steel’s sale of $1.5 billion in unsecured bonds has underscored high-quality Indian issuers’ covenant expectations.

The bonds were sold in two tranches: $500 million in 4.85% 5.5-year bonds and $1 billion in 5.95% 10-year bonds. They were rated BB+ by Fitch and BB by Standard & Poor’s, and will be listed on the Frankfurt Stock Exchange.

Although this was only Tata Steel’s first US dollar-denominated high-yield issuance, it went to market with a covenant package less onerous...