Muthoot Finance Secures $400 Million via Senior Secured Notes Under Global Medium Term Note Program

Muthoot Finance Ltd, a leading gold loan company, has raised $400 million (around ₹3,350 crore) by issuing Senior Secured Notes. This was done under its Global Medium Term Note Program, which allows the company to raise up to $2 billion. The issuance follows the Reserve Bank of India’s guidelines for External Commercial Borrowings (ECB).

The notes have an interest rate (coupon) of 6.375% per year and a maturity period of 4.5 years, with an average repayment period of 4 years, according to a statement from the company.

The issuance was highly popular with global investors, with the order book reaching over $1.3 billion, representing a 3.9x oversubscription. More than 125 international investors participated in the offering. The bonds received a BB/Stable rating from credit rating agencies S&P and Fitch. The issue also complied with Rule 144A of the U.S. Securities Act of 1933.

Muthoot Finance plans to use the funds raised for lending and other purposes allowed under RBI’s External Commercial Borrowing guidelines. The notes are listed on the NSE International Exchange (NSE IX) in Gujarat’s Gift City.

This is not the first time Muthoot Finance has raised funds through this route. It had previously raised $450 million in 2019 and $550 million in 2020, both of which were repaid on time in 2022 and 2023. Earlier this year, the company raised $750 million for 3.75 years at a 7.125% interest rate.

Commenting on the latest fundraising, George Alexander Muthoot, Managing Director of Muthoot Finance, said that this $400 million issuance will strengthen the company’s relationship with global investors. He highlighted that they were able to reduce the interest rate from 7.125% in the previous issuance to 6.375%, despite the longer maturity period of 4.5 years. This will help the company increase loan disbursements, diversify borrowing sources, and expand its investor base.