InvestorQ : How do you see the decision by UPL to raise dollar bonds worth $500 million and how do you see that impacting the stock price?
shrinidhi Rajan made post

How do you see the decision by UPL to raise dollar bonds worth $500 million and how do you see that impacting the stock price?

Answer
user profile image
Riya Dwivedi answered.
3 months ago


UPL became the first private sector company after the COVID scare to raise funds through the issue of dollar bonds. The only other company to raise funds through this route was the PSU, Rural Electrification Corporation. UPL will look to use these funds to repay some of its debt. Moody's Investors Service has assigned a Baa3 rating (stable) to the proposed senior unsecured notes. Apart from repayment of debt, UPL also wants to use some of the money to shore up its liquidity reserves in the post COVID-19 scenario. It is also expecting elongated working capital cycles as well as some supply disruptions leading to a negative working capital cycle. Even the leverage could increase and hence a solid dollar reserve would be useful. UPL is already the world’s largest post-patent agrochemicals company. In the case of UPL, the Coronavirus pandemic had a moderate impact on UPL's credit quality.