The group, which caters to sectors including construction and real estate, plans to raise $3.2 billion to $3.3 billion through the bond issue, with private credit funds expected to account for a bulk of the subscriptions, the sources said.
Foreign private credit funds Ares Management and Farallon Capital Management are likely to be the largest investors for the issue, while Cerberus Capital Management, Davidson Kempner Capital Management, One Investment Management and Varde Partners are among other big investors, they said.
Altogether, the investors may bid for 50%-75% of the issue, the sources added, requesting anonymity as they are not authorised to speak to the media.
The bond will likely have a maturity of about four years, with a pre-payment clause of redemption within three years, effectively reducing the maturity.
“The coupon on the bond issue is close to being finalised between 18% and 20%,” one of the sources said. “This yield is very lucrative and is drawing heavy interest from private credit funds.” The bond is expected to be secured by shares of Tata Sons that are held by the group through Sterling Investment Corp, they added. Deutsche Bank is the sole arranger for the deal. The proceeds will primarily be used to refinance existing debt, the sources said.
Shapoorji Pallonji Group, Cerberus Capital Management, One Investment Management, Varde Partners and Farallon Capital Management did not respond to an email seeking comment.
Deutsche Bank, Davidson Kempner Capital Management and Ares Management declined to comment.
