Muthoot Finance Limited has announced the issuance of a $400 million senior secured bond as part of its $2 billion Global Medium Term Note (GMTN) Programme. The bond issuance, conducted under Regulation S, is subject to market conditions and regulatory approvals.
The company has received ratings of Ba2 (Stable) from Moody’s, BB+ (Stable) from S&P, and BB (Stable) from Fitch, with the bond itself rated BB+ by S&P and BB by Fitch. The bonds will be secured by a first-ranking pari passu charge over Muthoot’s current assets, including gold loan receivables.
The newly issued $400 million 6.375% senior secured notes are due April 23, 2029, with an initial price guidance of 98.625 per bond, offering a 6.812% yield to average life. The bonds are structured with an amortization schedule, repaying 20% of the principal every quarter between April 2028 and April 2029.
The expected settlement date is March 26, 2025, with the bonds becoming immediately fungible upon settlement. The first coupon date is set for April 23, 2025, with semi-annual interest payments at a fixed rate of 6.375%.
Use of proceeds: Muthoot Finance intends to utilize the funds for onward lending and other business activities, in line with Reserve Bank of India (RBI) guidelines and external commercial borrowing (ECB) regulations.
Change of control provisions: The bonds include a change of control clause, which would be triggered if the Promoter Group loses control or if another entity acquires more than 50% of voting rights in Muthoot Finance.
The issuance is being handled by Deutsche Bank and Standard Chartered Bank as joint global coordinators and bookrunners. The bonds will be listed on NSE IFSC Ltd (NSE IX) and cleared through DTC, Euroclear, and Clearstream.
Muthoot Finance remains India’s largest gold loan NBFC, and this bond issuance marks another step in its efforts to diversify funding sources and support business expansion.
(Disclaimer: This article is for informational purposes only and does not constitute financial advice.)
