Indian mid-cap issues $130 million convertible bond

Autoparts maker Amtek India has raised $130 million from a fixed-price convertible bond that was upsized by 30% and triggered a rally in the share price. The deal proves that it is possible for mid-cap Indian companies to raise funds in the international CB market, but it also clearly shows that these deals are not an easy sell.

The five-year CB was offered with a 6% coupon and yield, which according to a source was the most the company could pay under Indian regulations that cap the interest on CBs at Libor plus 500bp. However, the coupon was not deemed to be enough for a mid-cap high-yield credit and to...