IIFL Finance has bought back $50 million worth of overseas bonds at par, funded by a corresponding loan of the same amount from a global bank, which will reduce its cost of funds by approximately 225 basis points on this transaction.
IIFL Finance had raised $400 million through its maiden overseas bonds issue in February 2020 at an effective issue price of $998.75 per $1000 of face value, to fund its business growth. The company had in the last two years bought back $26.3 million worth of bonds in various tranches, and launched a tender offer on March 21, 2022 to further buy back up to $50 million worth of bonds.
The minimum bid price for bondholders under the tender offer was $970 per $1000 of face value of bonds. However, most bids received were closer to the par value, and accordingly the company bought back the entire tender amount of $50 million at par. The buyback was done under modified Dutch auction process, which is a reverse book building mechanism. All accepted bids (i.e. atpar or lower) were settled at a uniform price of $1000 per face value on March 30, 2022. After this buyback, bonds of $323.7 million remain outstanding.
IIFL Finance is an Indian diversified financial services company.
