Public sector Rural Electrification Corporation (REC) has raised R700 crore through seven-year bonds at a coupon rate of 8.27% on Thursday, according to sources.

Prior to this, REC had issued seven-year bonds at 8.44% in early December 2014, paying 17 bps higher than the current yield.

“The benchmark yield has inched up a bit after seeing a drop on Wednesday. In the near term, bond yields for companies may hover at current levels or may harden a bit,” said Ashish Jalan, assistant vice-president at SPA Securities.

According to bond arrangers, Thursday’s issue was the last tranche by REC this fiscal. However, four other state-owned entities are in the pipeline to issue bonds before the end of this fiscal year, sources said.

Power Finance Corporation (PFC), Indian Railway Finance Corporation (IRFC) — the finance arm of the Indian Railways — Nuclear Power Corporation of India (NPCIL) and State Bank of Bikaner and Jaipur (SBBJ) are expected to hit the bond markets before the end of this fiscal year, according to bond arrangers.  NPCIL is expected to raise more than R2,000 crore through long-term bonds in the third week of March, sources said.

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IRFC may hit the bond markets early next week to raise R2,000-3,000 crore via short-tenure bonds while SBBJ is expected to seek bids for R200 crore on March 9, according to sources.

PFC, which managed to raise R1,600 crore through 10-year bonds at a coupon rate of 8.20% on Wednesday, may again come back to the markets, sources stated. On Wednesday, Power Grid Corporation had raised R1,305 crore through strip bonds of five-year, 10-year and 15-year tenures at a coupon rate of 8.15%. This was five basis points down from the already low levels of 8.20% level at which the company had issued bonds in January.