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Dollar bonds of a company controlled by Indian billionaire Gautam Adani rallied after the firm said it will consider a partial debt buyback, its first such move since it was targeted by a short seller in January.
Prices for all of outstanding bonds of Adani Ports & Special Economic Zone Ltd. rose on Thursday, reacting to a statement from the firm released the evening before. The company’s notes due in July 2024 gained 0.6 cent on the dollar to 94.3 cents, the biggest advance since March 24, according to data compiled by Bloomberg.
The partial repurchase would mark another effort by the tycoon to regain investor confidence. The group has also trimmed capital spending for growth and said its founders have repaid share-backed loans.
But governance and regulatory concerns about the conglomerate haven’t gone away, and that means yield premiums on Adani Ports’ bonds may continue to exceed other Indian notes that also have BBB- credit ratings, according to Bloomberg Intelligence.
“Most of the port company’s dollar bonds are close to 9% yields and at 65-85 cents to the dollar, which could make a buyback more compelling compared with rupee bonds,” said Sharon Chen, credit analyst at BI.
The company’s US-currency notes due in August 2027, for example, yielded 9.06% with a price of 83.1 cents on Thursday, according to Bloomberg-compiled data.
The group’s bonds and shares tumbled after Hindenburg Research released a critical report in January that accused it of fraud. The group has vehemently denied the short-seller’s allegations.
Prices for all of outstanding bonds of Adani Ports & Special Economic Zone Ltd. rose on Thursday, reacting to a statement from the firm released the evening before. The company’s notes due in July 2024 gained 0.6 cent on the dollar to 94.3 cents, the biggest advance since March 24, according to data compiled by Bloomberg.
The partial repurchase would mark another effort by the tycoon to regain investor confidence. The group has also trimmed capital spending for growth and said its founders have repaid share-backed loans.
But governance and regulatory concerns about the conglomerate haven’t gone away, and that means yield premiums on Adani Ports’ bonds may continue to exceed other Indian notes that also have BBB- credit ratings, according to Bloomberg Intelligence.
“Most of the port company’s dollar bonds are close to 9% yields and at 65-85 cents to the dollar, which could make a buyback more compelling compared with rupee bonds,” said Sharon Chen, credit analyst at BI.
The company’s US-currency notes due in August 2027, for example, yielded 9.06% with a price of 83.1 cents on Thursday, according to Bloomberg-compiled data.
The group’s bonds and shares tumbled after Hindenburg Research released a critical report in January that accused it of fraud. The group has vehemently denied the short-seller’s allegations.
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