In Short:
Brookfield-backed Data Infrastructure Trust in India has raised $941 million through rupee bonds to purchase American Tower Corp’s local assets. Only foreign investors can subscribe to this unique bond issue. The two series of bonds have a 9.99% interest rate, maturing in 2029. Additionally, Data Infrastructure Trust plans to fund the acquisition through bank loans and equity.
Brookfield-backed Data Infrastructure Trust, an Indian infrastructure investment trust (InvIT), has successfully raised $941 million through rupee bonds intended for the acquisition of local assets from American Tower Corp (ATC), according to a term sheet reviewed by Reuters.
Investment Structure and Eligibility
In a notable deviation from typical market practices, only foreign investors are permitted to participate in Data Infrastructure’s 79-billion-rupee issue. This structure arises from the funding being classified as a downstream investment, whereby an Indian entity with foreign investment seeks to acquire local assets, as specified in the term sheet.
Acquisition Details
Brookfield Asset Management, based in Canada, announced earlier in the year its intention to acquire ATC Telecom Infrastructure, ATC’s Indian operations, for $2.5 billion through the trust.
Bond Details
The bond issue comprises two series maturing in five years, carrying a quarterly interest rate of 9.99%, as noted in the term sheet. Approximately 30% of the total issue, which amounts to 23.7 billion rupees, is designated for anchor investors.
The anchor investors for the first series of bonds, which will mature on September 9, 2029, include Deutsche Bank, DBS Bank, BNP Paribas, Yash Fund, and Deccan Funding. For the second series, maturing on September 10, 2029, JP Morgan Chase Bank serves as the anchor investor, with a size of 4.98 billion rupees.
Credit Ratings and Future Financing
Both Crisil and Careedge have assigned the bond issue a rating of AAA, augmenting the coupon by 25 basis points for each rating downgrade. In addition to the bond issue, Data Infrastructure Trust plans to secure further funding through bank loans and equity to facilitate the acquisition, with rupee term loans and bonds amounting to approximately 49 billion rupees already arranged, according to Careedge.
