Motherson Group Issues $350M Dual Investment Grade Bonds

On July 4, 2024, Samvardhana Motherson International Limited announced via a stock exchange filing that it has successfully priced $350 million in 5.625% senior secured guaranteed notes.

These notes were issued through its subsidiary, SMRC Automotive Holdings Netherlands B.V. (SAHN BV), with a corporate guarantee from SAMIL. This marks Motherson Group’s return to the US bond market after 8 years, receiving dual investment grade ratings from Moody’s and Fitch.

The issuance attracted strong interest, with orders exceeding $2.2 billion, showing high confidence from global investors in Motherson Group’s credit profile and business strength.

Transaction Highlights

• Due to strong investor interest, the Notes were issued at a competitive 5.625% coupon rate, helping Motherson Group reduce borrowing costs.
• The issuance is debt-neutral, with proceeds used to repay existing debt.
• The investor base diversified, with 96% allocated to asset managers, insurance companies, and sovereign wealth funds and the remainder to banks and other accounts.
• Investors from Asia accounted for 40%, EMEA for 38%, and North America for 22% of participation.

The Notes will be listed on the Frankfurt Stock Exchange. BNP Paribas, Citigroup, HSBC, J.P. Morgan, and MUFG served as Joint Global Coordinators and Joint Lead Managers, with DBS and Standard Chartered as Joint Lead Managers for the transaction.

Mr Laksh Vaaman Sehgal, Vice Chairman of Motherson Group, said, “The success of this transaction is a testament to the Motherson Group’s adherence to its prudent financial policies, underscored by recent rating upgrades by various international rating agencies. Motherson today is a strong and diversified platform that supports its customers globally. We thank our customers and investors for their trust and confidence in us.”

About Samvardhana Motherson International Ltd

Samvardhana Motherson International Limited (SAMIL), formerly Motherson Sumi Systems Limited, began in 1986 as a joint venture with Sumitomo Wiring Systems. The company is known for its specialised automotive components for OEMs and has expanded into diverse sectors, including technology, industrial solutions, health & medical, aerospace, and logistics. It is India’s largest auto ancillary and ranks among the top 15 automotive suppliers worldwide.

On July 5, 2024, the share price of Samvardhana Motherson International Ltd opened at ₹207.45, touching the day’s low of ₹203.09 as of 9:55 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.