Ailing national carrier Air India has invited banks to bid for underwriting roles in a sale of Rs 7,400 crore government-guaranteed bonds, a document seen by Reuters showed.
The firm is looking to issue bonds with a maturity of 19 years in a private placement. The debt will be re-payable in five equal installments starting in the 15th year from the date of allotment, the document showed.
Air India is looking to pay a coupon equivalent to a spread over a government security with equivalent maturity, but will be subject to an overall cap of 9.50 percent per year, according to the document.
The bond sale is part of the financial restructuring plan approved by the government for Air India.
The interest paid on the bond will be serviced by the airline out of the equity infusion by the government into Air India.