RCom bonds drop to 7-month low after offer to repay holders at a discount

Anil Ambani, Chairman of India’s Reliance Communication | Photo: Reuters
Bonds that Reliance Communications Ltd. defaulted on last year slumped to a seven-month low on Tuesday, after the Indian mobile operator controlled by billionaire Anil Ambani offered to repay holders at a discount to the principal value.

The firm, which is set to meet with bondholders on Aug. 10, has been trying to close a sale of wireless assets to Reliance Jio Infocomm Ltd. that would raise money to help pay creditors.

Reliance Communications’ 2020 dollar notes fell 2 cents on the dollar to 43 cents as of 6:00 p.m. in Hong Kong, the lowest since December, according to prices compiled by Bloomberg. The securities slid 5.3 cents on Monday, the biggest decline since May.

“The options Reliance Communications is offering bondholders don’t look very favorable,” said R. Lakshmanan, senior research analyst at CreditSights in Singapore.

A Reliance Communications spokesman wasn’t able to immediately reply to an email and call seeking comment.

Global Cloud Xchange bonds due 2019 fell 1.8 cents, the sharpest drop since May, to 87 cents on Tuesday, Bloomberg-compiled prices show.