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Business Standard
3 days ago
- Business
- Business Standard
Shapoorji Group bags $3.35 bn in largest private deal led by Deutsche Bank
The $3.35 billion financing was raised via 3-year NCDs at a 19.75 per cent annual yield, up from last year's 18.75 per cent when Goswami Infratech raised $1.7 billion in debt Rimjhim Singh New Delhi Deutsche Bank has planned the largest private credit transaction outside the United States by raising $3.35 billion for the Shapoorji Pallonji (SP) Group. The infrastructure conglomerate leveraged a portion of its Tata Sons stake as collateral, attracting commitments from major global investors, including BlackRock and Morgan Stanley, according to a report by The Economic Times. The financing was secured through three-year non-convertible debentures (NCDs) offering a 19.75 per cent yield, compounded annually and payable at maturity. This marks a rise from earlier debt issuances, which commanded yields approximately one percentage point lower. In 2023, SP Group's Goswami Infratech had raised $1.7 billion at an 18.75 per cent yield, the news report said. Deutsche Bank's significant commitment and syndication The $3.35 billion funding round brought together three distinct investor groups: existing bondholders of Sterling bonds, current investors in Goswami bonds, and a new cohort of private credit investors from the US, the UK, Hong Kong, Singapore, and India. Deutsche Bank spread its exposure across international credit funds, with BlackRock acquiring $70 million, Sona Capital investing $180 million, Morgan Stanley Investment Management putting in $60 million, and PIMCO contributing $45 million. This consortium totalled around $355 million, complemented by a separate $500 million investment from Ares Capital. Farallon Capital, a longstanding creditor to the SP Group, invested $596 million (approximately ₹5,100 crore). Other key participants included Davidson Kempner and Cerberus Capital, committing $401 million and $474 million respectively. Secured by stake in Tata Sons and real estate arms The debt is secured against SP Group's 9.2 per cent shareholding in Tata Sons, held through Sterling Investment, as well as assets in Shapoorji Pallonji Real Estate and SP Energy — the group's oil and gas business. This issuance, exclusively arranged by Deutsche Bank, represents the first large-scale corporate bond placement following changes in Foreign Portfolio Investor (FPI) norms, which now permit offshore investment under the general limit route instead of the more restrictive Voluntary Retention Route (VRR), the news report said. Regulatory changes and timing impact the deal Originally aiming for a March close, the transaction was completed six weeks later, delayed by geopolitical uncertainties. While part of the proceeds will refinance existing debt and support growth in SP Group's real estate and engineering, procurement, and construction (EPC) businesses, the deal is expected to transform capital access for large Indian conglomerates, the news report said.
Economic Times
3 days ago
- Business
- Economic Times
Shapoorji Group secures $3.4 billion in record Deutsche-led credit deal
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel Deutsche Bank anchored the largest private credit deal outside of the US, garnering $3.35 billion for the Shapoorji Pallonji Group, as the infrastructure conglomerate used a part of its Tata Sons stake as collateral to draw commitments from the likes of BlackRock and Morgan Stanley in a global funding syndicate, people familiar with the matter three-year non-convertible debentures (NCDs) carry a 19.75% yield, compounded annually and payable at maturity. Funds were earlier raised at a rate that was about a percentage point lower. In 2023, SP Group's Goswami Infratech had raised $1.7 billion at 18.75%. The German lender committed $893 million to the bonds, and is likely to retain a significant amount - of more than $500 million - on its books. Deutsche Bank has syndicated to financiers including BlackRock, Sona Capital, Morgan Stanley, and PIMCO. Firms such as Sona Capital and PIMCO executed their first major private credit India trade through this entire funding round of $3.35 billion drew three distinct pools of capital -- existing bondholders in Sterling bonds, existing bondholders in Goswami bonds, and a fresh slate of global private credit investors from the U.S., U.K., Hong Kong, Singapore, and Deutsche Bank also distributed its exposure across a consortium of international credit funds. BlackRock picked up $70 million, Sona committed $180 million, Morgan Stanley Investment Management took $60 million, and PIMCO added $45 million, bringing the consortium's total to about $355 million. Separately, Ares has invested in $500 Capital, a long-time creditor to SP Group, followed with a $596 million (Rs 5,100 crore) investment. Davidson Kempner and Cerberus Capital committed $401 million and $474 million respectively. Spokespersons of Deutsche Bank and SP Group did not respond to requests for debt is secured by SP Group's 9.2% stake in Tata Sons held via Sterling Investment, its real estate arm Shapoorji Pallonji Real Estate, and SP Energy, the oil and gas business. The issuance, arranged solely by Deutsche Bank, is the first large corporate bond placement under the revised FPI norms, which now allow offshore investments through the general limit route instead of the restrictive Voluntary Retention Route (VRR).DB originally targeted a March closing but ultimately executed the transaction six weeks later after geopolitical stability. 'This regulatory tweak, where the RBI revised FPI norms for corporate bonds, helped investors invest through the general investment route,' said a source. 'It was key for investors that wanted one-off exposure to India without committing to an ongoing India-dedicated book.' While the transaction is partially going to be used for refinancing existing debt and funding growth in real estate and EPC businesses, it will change how large conglomerates access longterm capital, said an investor in the bond.'Most people see Shapoorji as a real estate player. But it is India's largest EPC group after L&T,' one bond investor in the deal said. 'This deal will deepen nonbank financing avenues for corporate India and will significantly deepen the private credit market in India.' Other investors in the deal include Kingstreet $150 million, EAAA $82 million, Synergy Metals & Mining $75 million, BroadPeak $55 million, Discovery $25 million, and ASK Finance $23 million, among others. In total, 14 investors participated.
Time of India
3 days ago
- Business
- Time of India
Shapoorji Group secures $3.4 billion in record Deutsche-led credit deal
Deutsche Bank anchored the largest private credit deal outside of the US, garnering $3.35 billion for the Shapoorji Pallonji Group, as the infrastructure conglomerate used a part of its Tata Sons stake as collateral to draw commitments from the likes of BlackRock and Morgan Stanley in a global funding syndicate, people familiar with the matter said. The three-year non-convertible debentures (NCDs) carry a 19.75% yield, compounded annually and payable at maturity. Funds were earlier raised at a rate that was about a percentage point lower. In 2023, SP Group's Goswami Infratech had raised $1.7 billion at 18.75%. The German lender committed $893 million to the bonds, and is likely to retain a significant amount - of more than $500 million - on its books. Deutsche Bank has syndicated to financiers including BlackRock, Sona Capital, Morgan Stanley, and PIMCO. Firms such as Sona Capital and PIMCO executed their first major private credit India trade through this deal. Distribution of Exposure The entire funding round of $3.35 billion drew three distinct pools of capital -- existing bondholders in Sterling bonds, existing bondholders in Goswami bonds, and a fresh slate of global private credit investors from the U.S., U.K., Hong Kong, Singapore, and India. The Deutsche Bank also distributed its exposure across a consortium of international credit funds. BlackRock picked up $70 million, Sona committed $180 million, Morgan Stanley Investment Management took $60 million, and PIMCO added $45 million, bringing the consortium's total to about $355 million. Separately, Ares has invested in $500 million. Farallon Capital, a long-time creditor to SP Group, followed with a $596 million (Rs 5,100 crore) investment. Davidson Kempner and Cerberus Capital committed $401 million and $474 million respectively. Spokespersons of Deutsche Bank and SP Group did not respond to requests for comment. Regulatory Tweak The debt is secured by SP Group's 9.2% stake in Tata Sons held via Sterling Investment, its real estate arm Shapoorji Pallonji Real Estate, and SP Energy, the oil and gas business. The issuance, arranged solely by Deutsche Bank, is the first large corporate bond placement under the revised FPI norms, which now allow offshore investments through the general limit route instead of the restrictive Voluntary Retention Route (VRR). DB originally targeted a March closing but ultimately executed the transaction six weeks later after geopolitical stability. 'This regulatory tweak, where the RBI revised FPI norms for corporate bonds, helped investors invest through the general investment route,' said a source. 'It was key for investors that wanted one-off exposure to India without committing to an ongoing India-dedicated book.' While the transaction is partially going to be used for refinancing existing debt and funding growth in real estate and EPC businesses, it will change how large conglomerates access longterm capital, said an investor in the bond. 'Most people see Shapoorji as a real estate player. But it is India's largest EPC group after L&T,' one bond investor in the deal said. 'This deal will deepen nonbank financing avenues for corporate India and will significantly deepen the private credit market in India.' Other investors in the deal include Kingstreet $150 million, EAAA $82 million, Synergy Metals & Mining $75 million, BroadPeak $55 million, Discovery $25 million, and ASK Finance $23 million, among others. In total, 14 investors participated.
