Bharat Forge pulls off high premium CB

Good equity story, strong credit and a proven convertible bond track record gave investors confidence to accept a 60% premium from the Indian issuer.

By Anette Jönsson

April 19, 2006

IndiaÆs Bharat Forge early yesterday April 19 completed an $80 million two-tranche convertible bond through Citigroup that was priced with an aggressive 60% conversion premium on half the deal. To pull that off, both tranches had a longer than usual maturity and a relatively high yield.

It also helped that the company, which is the flagship of the Kalyani Group and IndiaÆs leading manufacturer and exporter of steel forgings and components for the auto industry, is considered a solid Indian credit and one that has been to the market before with a similarly structured CB.

ôItÆs definitely a punchy premium, but Bharat Forge is a good name which investors are familiar with and many...

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