IOC bond draws $2bn bid
New Delhi   28-Jul-2011

In spite of weak financial markets, flagship refiner-marketer IndianOil Corporation’s debut 10-year overseas bond offering of $500 million drew bids worth four times the float size from more than 200 investors.

IndianOil was the only borrower to print a deal in the US dollar markets on July 25 night but investment bankers xpressed fears that the record-low fees paid to underwriters could set a a trend in a weak market. BNP Paribas, Citigroup and RBS won the mandate for the offering in late June after agreeing to work the deal for just $1, the worst terms in recent memory for an Asian bond issue in the international markets.

“The issue was oversubscribed by about four times and IndianOil received offers of about $2 billion,” a statement said. Asian investors were allocated 71%, European investors 25% and US offshore investors 4%.