Indian corporate Ultratech Cement has launched its debut dollar bond this morning. It is looking to raise up to $400mn via a 10Y sustainability-linked bond with an initial price guidance of 210bp area over Treasuries. Based on the current 10Y Treasury yield, the proposed yield on the bond is 3.28% area. The proposed issuance is also the first sustainability-linked bond from India. The senior unsecured bonds have an expected investment grade rating of Baa3/BBB- and have already received orders of over $1bn as at 11:15am SGT. The proposed bonds carry a coupon step-up of 75bp if the company misses its sustainability target, which is linked to the amount of carbon dioxide it produces, as per IFR. The Aditya Birla Group-owned company plans to use proceeds from the dollar bond to refinance existing rupee debt and for general corporate purposes. Both Fitch and Moody’s have a negative outlook on the company, mirroring the rating agencies’ outlook on India. As per Fitch’s ratings release, “The company has a geographically diversified presence in India and benefits from its competitive position, which is underpinned by its strong branding and cost-efficient operations. In Fitch’s view, these factors have helped UTCL deliver profitability that is above the industry average and position it well to cope with the industry’s inherent cyclicality.”

The new year has seen a flurry of dollar bond deals from Indian issuers with renewable energy company India Green Power / ReNew Power also launching a 6NC3 bond this morning at 4.25% area, following last week’s $750mn issuance from IRFC and $561mn issuance from Continuum Energy.

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