1. Nirma issues 60-year bonds to raise Rs 1,500 crore

Nirma issues 60-year bonds to raise Rs 1,500 crore

Long-tenure bonds are back in the market even as Nirma has issued bonds with a tenure of 60 years to raise Rs 1,500 crore, according to information provided by market sources.

By: | Mumbai | Published: July 7, 2017 4:10 AM
Nirma, Nirma news, Nirma latest news, Nirma bond, long tenure bonds, Nirma long tenure bonds Nirma has sold Rs 900 crore of bonds via Series 1 and Rs 300 crore each via Series 2 and Series 3.

Long-tenure bonds are back in the market even as Nirma has issued bonds with a tenure of 60 years to raise Rs 1,500 crore, according to information provided by market sources. The issue has three series. The company has sold Rs 900 crore of bonds via Series 1 and Rs 300 crore each via Series 2 and Series 3. The bonds in Series 1 have a coupon rate of 9.5%. It has a call option after 5th year and every year thereafter. The coupon will step up by 150 basis points if the call is not exercised after the fifth year and will step up further by 25 basis points each at the end of 6th and 7th year, bond market sources indicated. The bonds in Series 2 have a coupon rate of 9.65%. It has a call option after 7th year and every year thereafter. The coupon will step up by 150 basis points if the call is not exercised after the seventh year and further by 50 basis points after the 8th year, according to sources.

The bonds in Series 3 have a coupon rate of 10.15%. It has a call option after 10th year and every year thereafter. The coupon will step up by 200 basis points if the call is not exercised after the tenth year, sources said. “With yields remaining at lower levels in India, investors tend to have a good appetite for longer tenure bonds that provide attractive yields,” said a bond market source.

This is not the first time that a corporate is issuing a long-tenure bond. In 2013, M&M issued a 50-year bond at 9.55%. In 2012, Tata Power issued a 60-year bond at 10.75%.

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