Power Finance Corporation (PFC) likely raised more than R11,000 crore through bonds in March...
Power Finance Corporation (PFC) likely raised more than R11,000 crore through bonds in March, according to bond arrangers.
“Power Finance Corporation approached the bond markets four times in March. They raised more than R11,000 crore this month through the bond markets,” said Ajay Manglunia, senior vice-president-fixed income, Edelweiss Securities.
“This is probably the first time the company has raised such a quantum in a single month,” another bond arranger told FE. PFC made a one-on-one placement with the Life Insurance Corporation of India (LIC) to raise R5,000 crore through 10-year bonds, said bond arrangers.
PFC could not be reached for comments.
An LIC official, talking on condition of anonymity, couldn’t divulge the coupon rate. No money had changed hands at this point in time, the official said.
“This was a massive placement with a single company and it is believed that the coupon rate could be near 8.41%, which is a bit higher than other issues of PFC of the same tenure,” a leading bond arranger said. Early this month, the company issued 10-year bonds worth R1,600 crore at 8.20%. On Tuesday, PFC raised R100 crore through bonds with a tenure of three years and one month at a coupon rate of 8.34%. The company also raised R1,350 crore through bonds with a tenure of five years and one month at a coupon rate of 8.38%, said bond arrangers.
PFC would use the funds to refinance existing debts as well as lending purposes, they added. In mid-March, PFC raised R1,175 crore through bonds of three years and three months at a coupon rate of 8.40%, R200 crore through five-year bonds at 8.42% and R925 crore through bonds having a tenure of 10 years and one month at a rate of 8.39%. The total amount raised was R2,300 crore.
Before that, the company raised about R1,080 crore through bonds having a maturity of three years and three months at a coupon rate of 8.29%, said bond arrangers.
The corporate bond market has seen a huge appetite this year with the funds raised through this route nearing bank credit. From April 2014 to January this year, companies have raised R3.15 lakh crore through private placement of corporate bonds, according to Sebi data. In contrast, non-food credit in the same period stood at R3.41 lakh crore.