Jubilant Life Sciences raises $300 million via bond issuance

MUMBAI: Amidst a selloff in Indian equity markets, NSE-listed Jubilant Life Sciences has successfully raised $300 million through a sale of unsecured bonds by its pharmaceuticals arm in Singapore, according to people directly familiar with the details of the offering. The bond issue which opened in Singapore this morning was oversubscribed to the extent of four times the value of the book on offer and is said to have attracted high quality investors including private banks and asset management companies such as Fidelity and HSBC Asset Management.

The Singapore-based arm, Jubilant Pharma Limited, is a 100% subsidiary of Jubilant Life Sciences and supplies injectable medicines used for radio imaging in diagnosis for patients with lung, brain and kidney related medical conditions. Its primary markets are USA and Canada.

The bonds have been subscribed at the tight end of the final price guidance offering a yield of 4.875% to investors, according to the people referred to above. The company received bids over $1 billion. The bonds will be listed on Singapore Stock Exchange.

The bids are said to have built up during the course of the day despite news of surgical strikes by India in Pakistan which led to the biggest single day fall in three months for the benchmark Sensex which declined 465 points.

HSBC, JP Morgan and Credit Suisse were amongst banks mandated to manage the sale.

Jubilant Life Sciences in a notification to the National Stock Exchange on September 23rd indicated that its wholly-owned subsidiary Jubilant Pharma Limited had approved the issue of unsecured bonds, though it did not provide further details.

When contacted, R Sankaraiah, Executive Director, Finance, Jubilant Lifesciences Limited, confirmed that the book for the bond issue had been closed but declined to provide further details.

In a note circulated on 23rd September, ratings agency Fitch rated the proposed offering BB with a stable rating outlook. Fitch analysts Akash Gupta and Snehdeep Bohra indicated that Jubilant Pharma Limited’ Draximage business is the fourth-largest participant by sales in the small North American nuclear imaging market. The note further said, “Draximage faces very limited competition for some of its top products, such as MAA, an albumin injectable used in lung imaging, and DTPA, a pentetate injectable used for brain and kidney imaging, both of which have no competitors at present”.

“Global fixed income investors are now scouting for higher returns as more than $13 trillion worth of bonds stand yielding negative returns. With a stable currency and improving macro-economic parameters, India now stands out among its emerging market peers”, according to a banker who spoke on the condition of anonymity.

“A lot of lower rated companies are now queuing up for high yield issuances, which now find investor appetite in the global markets,” said an investment banker.

Drug-maker Glenmark successfully raised $200 million via an overseas offering of bonds Singapore in July this year. Delhi International Airport Limited, a company owned by Bengaluru-based GMR Infrastructure raised $288 million through a similar offering early last year.