Samvardhana Motherson Bags $350 Million in Bond Deal with Overseas Investors| Stock Market News
Samvardhana Motherson International, a leading auto parts maker, has successfully raised $350 million by issuing five-year bonds to international investors. The bonds, sold by their subsidiary SMRC Automotive Holdings Netherlands, were priced at 140 basis points above the current five-year US Treasury rate of around 4.30%, resulting in a yield of 5.72%.
The company plans to use the funds to refinance debt that is due later this month, according to sources familiar with the matter.
Details of the Bond Issue
The final interest rate on these bonds was lower than initially expected. Originally, the company had indicated that the bonds would be priced at 175 basis points above the five-year US Treasury rate. However, strong demand from investors allowed them to narrow this down to 140 basis points. The total interest in the bonds reached $2.20 billion, which helped the company secure better terms.
JP Morgan, MUFG, DBS Bank, and BNP Paribas were among the banks involved in managing the bond issue.
This fundraising move will help Samvardhana Motherson manage its existing debt, ensuring financial stability as they continue their operations and growth in the auto parts sector.
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