Biocon Ltd’s Biocon Biologics Refinances $1.1 Billion Debt with New Bonds and Syndicated Facility

Biocon Ltd has successfully priced the debut issuance of senior secured Notes worth USD 800 million (~₹66,763 million) for its subsidiary, Biocon Biologics. These bonds, which have a coupon rate of 6.67%, will mature in 2029 and are expected to be listed on the Singapore Stock Exchange. The transaction, scheduled for settlement on October 9, 2024, is subject to customary closing conditions. 

This issuance marks a significant milestone as it is the first USD bond issuance by a biopharmaceutical company in the Asia Pacific region. Furthermore, it stands as the largest debut issuance from a high-yield-rated issuer in India over the past decade. The strong demand for these bonds was evident, with a peak order book exceeding USD 2.5 billion (around ₹2,08,634 million), resulting in an oversubscription of more than three times the issue size. 

The final order book was notably diversified, with a substantial portion of the investors being top-tier real money investors worldwide, reflecting confidence in Biocon Biologics’ robust credit profile and growth potential. Geographic distribution of the final order book was well-balanced, with the U.S. accounting for 47%, EMEA (Europe, the Middle East, and Africa) at 27%, and Asia at 26%.

To further bolster its financial standing, Biocon Biologics has also entered into a commitment agreement for a new syndicated debt facility. The proceeds from this bond issuance, along with the new syndicated facility, will be utilized to refinance existing debt amounting to USD 1.1 billion (~₹93,468 million). This strategic move aims to enhance the company’s liquidity profile, provide financial flexibility, and enable reinvestment opportunities within the business.

Commenting on this, the CEO and Managing Director of Biocon Biologics, Shreehas Tambe, said, “This strategic refinancing underscores our commitment to enhance financial flexibility, fuels Biocon Biologics’ long-term growth and is core to the consolidation phase of our business. We expect this transaction to strengthen our capital structure and allow us to redeploy investments into the business, including advancing our differentiated pipeline of biosimilars. It will also enable us to diversify our investor base to include marquee global funds and healthcare investors who seek to participate in Biocon Biologics’ growth story.”

Kedar Upadhye, Chief Financial Officer of Biocon Biologics, stated, “The refinancing of our debt through Bonds and syndicated term loans demonstrates strong financial flexibility and continued access to a diversified pool of capital. This successful debut bond issuance by Biocon Group at a global level highlights the strong credit profile of the biosimilar business. As part of this issuance, the Company went through a robust rating exercise from leading international agencies with the bonds expected to be rated as “BB” from both S&P and Fitch.”

On October 3, 2024, the share price of Biocon Ltd opened at ₹362.40, touching the day’s low at ₹361.65, as of 11:18 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.