Shriram Transport Finance Company (STFC) is planning a public issue for an amount of upto\u00a0Rs 5,000 crore through secured redeemable non-convertible debentures (NCDs). Over the past week several large companies \u2014 Tata Steel, Ultratech Limited and Idea Cellular \u2014 have announced NCD issuances. While commercial banks had been lowering their lending rates in the early part of 2018 over the past month most lenders have increased interest rates on loans. Consequently, although interest rates on loans and bonds had converged after about four years borrowers seem to be preferring to borrow from the corporate bond market. The proposed NCDs have been rated \u2018CRISIL AA+\/Stable\u2019 by CRISIL. STFC is a Non-Banking Financial Company (NBFC) that focuses on loans for pre-owned commercial vehicles. With a tenor of 3, 5 and 10 years, the effective coupon ranges from 8.93% pa to 9.40% pa across the series. There will be an additional incentive ranging from 10-35 bps for high net worth individuals (HNI), small Investors and senior citizens. The coupon rates are nearly 100 basis points (bps) higher than the government securities of the corresponding tenors. According to data on Bloomberg, coupon rates reflected on FIMMDA, have shot up by almost 80 bps since the beginning of January. Currently, coupon rates for top-rated companies are at 9%, 9.1% and 9.23% for three, five and 10 years respectively. According to dealers, coupons for NCDs issued by NBFC higher, or at times lower, than those on government securities by about 25 bps,depending on the rating of the paper and the issuer\u2019s credibility. \u201cThe funds raised through this issue will be used for onward lending, financing, and for repayment\/ prepayment of interest and principal of existing borrowings of the Company and for general corporate purposes,\u201d Shriram Transport said in a press release.