The overwhelming response to IOC's bonds has reconfirmed the confidence of international investors in the credit credentials of IOC.
NEW DELHI: Indian Oil Corporation, on July 23 2013, priced $500 million bonds for a tenor of 10 years under Regulation S format. This was IOC's fourth international bond in last about three and half years.
During the Federal Open Market Committee on June 19 2013, it was indicated that US Fed would moderate the asset purchase based on improvement in US economy. These indications were not taken favourably and markets went into sell off mode. Considering the market conditions, IOC realigned its strategy of bond issuance and postponed its investor meetings and pricing from first week of July 2013 to second and third week of July 2013 so that markets could cool off and investors' appetite for investment could resurface as they needed capital deployment after sell off.
The above strategy worked as after the successful investor meetings in Singapore, Hong Kong and London, IOC priced the bonds aggressively without any new issue premium.
During the Federal Open Market Committee on June 19 2013, it was indicated that US Fed would moderate the asset purchase based on improvement in US economy. These indications were not taken favourably and markets went into sell off mode. Considering the market conditions, IOC realigned its strategy of bond issuance and postponed its investor meetings and pricing from first week of July 2013 to second and third week of July 2013 so that markets could cool off and investors' appetite for investment could resurface as they needed capital deployment after sell off.
The above strategy worked as after the successful investor meetings in Singapore, Hong Kong and London, IOC priced the bonds aggressively without any new issue premium.
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