Bharat Petroleum Corp. Ltd. (BPCL), the country's second-biggest refiner-marketer, has raised US$500 million via a ten-year bond issue to fund its capital expenditure.

The company said in a statement that the notes would bear a fixed interest of 4.625% per year. The interest will be payable semi-annually. The company priced the transaction at a spread of 2.9 per cent per annum over the ten-year US Gilts. It represents the lowest spread in comparison with US Treasury among all ten-year bond issuances out of India this year.

Funds will be used for the company's ongoing as well as future projects in the country. Stating the purpose, the company said, "The proceeds of the issuance will be used to fund capital expenditures for BPCL's ongoing and future domestic projects."

R K Singh, chairman & managing director of BPCL, said the successful pricing of the company's debut transaction testified the country's credit strengths as well as the country's strong macroeconomic fundamentals.

As per the company's claims, the issue was oversubscribed by nearly fifteen times - the highest over subscription for any US dollar bond out of the country.

Sixty-two per cent of the notes were distributed to fund managers, 12 per cent to insurance companies & corporate houses, 14 per cent to private banks, and 10 per cent to banks. Demographically, 73 per cent of the notes were distributed to Asia and the remaining 27 per cent to Europe.