Power Finance Corporation (PFC) has raised R3,000 crore through short-tenure bonds, two arrangers familiar with the transaction told FE. “PFC has raised R1,500 crore through two-year bonds at a coupon rate of 8.35%, and another R1,500 crore via 3-year bonds at 8.39%,” bond arrangers, said. On Monday, Power Grid Corporation (PGC) had raised R2,928 crore through bonds having a tenure of 15 years with stripped payments ranging from the end of the fourth year till the 15th year at a coupon rate of 8.40%, said sources.
The market was expecting PFC to issue bonds across four different tenures — two years with bullet payment; one year, eleven months and 26 days; three years with bullet payment and two years, eleven months and 26 days.
In April, the company had received bids at 8.03% and 8.09% for three- year money while for tenures close to two years, the company had paid 8%, arrangers said.
Yields have cooled-off compared with the rates prevailing early May when there was a global sell-off in bonds. At the time AAA-rated PSU were being priced in the range of 8.43-8.72% for short tenures compared with the yields of 7.95% in April.
“Short-term rates are likely to be buoyant with the approaching credit policy as hopes of a rate cut are getting factored-in. However, we can expect yields to settle around 7.90-8.30% in the near term,” said Ajay Manglunia, senior vice-president, fixed income at Edelweiss Securities.
PFC is said to have raised more than R11,000 crore through the bond markets in March, according to information provided by sources.
Bond market participants said a few companies which had earlier postponed their fund-raising plans are likely to make a comeback immediately after the Reserve Bank of India’s bi-monthly monetary policy on June 2.
Rural Electrification Corporation (REC) which is a regular borrower in the bond market is likely to issue long-tenure bonds soon after the policy, sources said.
Power Grid’s subsidiaries — Vizag Transmission and NM Transmission company — which had earlier postponed their bond issues are likely to approach the markets soon according to market experts.
Nuclear Power Corporation of India (NPCIL) is also likely to issue long-tenure bonds somewhere in the month of June, according to a source.
For Updates Check Banking News; follow us on Facebook and Twitter