The multinational steel producer JSW steel headquartered in Mumbai seeks to raise $1 billion (Rs.7300 crores) of debt in the form of bonds. Half the portion of the bond will be raised from foreign investors whereas the remaining portion will be raised from local investors. The company aims to launch the bond under ESG(Environment, Social and governance) program, a sustainable investing program. ESG tag will help to reduce the costs associated with the borrowings as the purpose is used for a dedicated cause.

Proceeds from the issuance will be used for reducing debt and general corporate purposes. Deutsche Bank, Citibank, Standard Chartered Bank, and Credit Suisse will be managing the bond issue in the international market. The tenor of the bonds may have maturities of five, seven, or ten years.

Jindal-led JSW steel acquired Delhi headquartered Bhushan Power & Steel for Rs. 19,350 crores. American credit agency Fitch revised its outlook from negative to positive on Jindal steel and rated BB-, while Moody's long-term corporate family ratings are Ba2.

JSW Steel reported a record-high net profit of Rs.5904 crore in the Q1 report of 2021 with an integrated loss of Rs. 554 crore last year in the same period. Since the U.S treasury yield has fallen to 1.24%, the Indian companies tap into the overseas pools of liquidity. To simply put it bond yields and bond prices move inversely. Let us say a treasury bond offers a 4% coupon rate, and a year later market interest rates fall to 3%. The bond will still pay a 4% coupon rate, making it more valuable than new bonds paying just a 3% coupon rate. If you sell the 4% bond before it matures, you will probably find that its price is higher than it was a year ago. Along with the rise in price, however, the yield to maturity of the bond will go down for anyone who buys the bond at the new higher price. High bond prices mean lower yields or lower interest rates which is good for companies earnings. Conversely, low bond prices mean higher yields, which increases borrowing costs for companies.

Hence a fall in the yield of US Treasury yield would help to reduce the borrowing costs for the companies which would turn lucrative from the companies earning perspective. Overseas markets offer greater outcomes than the domestic market which appeals to the Indian companies to tap into it.