Encouraged by the ample liquidity and the host of fresh issues in the corporate bond market, financial institution IFCI Ltd has given mandate to the Kotak Mahindra Capital Company to mobilise Rs 50 crore via a private placement of bonds.
The issue is for a period of three years and is rated e A+ by Credit Analysis and Research, and AA- by Fitch Ratings India Pvt Ltd.
Though the coupon rate on the issue is yet not decided, money market analysts feel that the rate should be in the range of 11.50 per cent to 11.75 per cent.
The comfortable liquidity position followed by large inflows through redemption and coupon payments of government security has seen host of new issues in recent times.
Bharat Petroleum Corporation Ltd has recently raised a Rs 390 crore through a five-year non-convertible debenture issue at a coupon at 9.95 per cent -- lowest ever primary market yield in recent times.
Indal has also entered the market to raise Rs 50 crore through a five-year paper at the same coupon rate. Indo Gulf Corporation, has also raised Rs 25 crore via a three-year paper at a very low coupon rate of 9.70 per cent.
The primary issues, in recent times, however were mainly form the 'AAA' rated corporates. But as the IFCI, entered the market, dealers feel that many more lower rated corporates to enter the market very soon.
A corporate bond dealer said, "the secondary market yield has gone down so much across all ratings that even the lower rated companies can raise loan at reasonably cheap rates."
