India's Sun Pharma plans $1 billion local debt sale for loan takeout, sources say

Business Recorder reported, citing three sources, that India's Sun Pharmaceutical Industries is preparing a rupee-denominated debt sale worth about 100 billion rupees, or $1.04 billion. The funds would help refinance part of a bridge loan the company arranged to buy US healthcare firm Organon & Co. Sun Pharma had not replied to a Reuters email seeking comment when the sources spoke.

Such bridge facilities are generally short term and are usually swapped later for longer dated bonds or loans. The drugmaker completed the syndication of an 18-month bridge facility of nearly $12 billion earlier this year, and State Bank of India was among the lenders. The sources asked not to be named because they are not authorised to speak to the media.

Sun Pharma is expected to sell bonds maturing in two, three and four years. Bankers foresee record domestic corporate debt issuance this year since higher US yields are raising the cost of dollar borrowing, and the 10-year US yield is at its highest since mid-June 2007. Indian firms are seeking to fix their financing expenses ahead of a possible Reserve Bank of India rate increase, with about $3 billion of rupee debt deals lined up over the coming days.