Power Finance Corporation (PFC) is set to privately place a five-year non-convertible debenture issue of Rs 200 crore next week.
The details of the issue - coupon rate and the maturity period - are being worked out. The company is in talks with the leading merchant bankers of the country to appoint them as managers of the issue.
The state-owned power finance has recently retired Rs 600 crore of high cost debt last month. Details of the paper to be issued, though have not been decided yet, is expected to be well within the 9.95 per cent interest rate offered by Bharat Petroleum Corporation Ltd (BPCL) for a similar issue recently. The PFC is targetting a market borrowing of Rs 2,100 during the current fiscal.
Encouraged by the easy liquidity in the system, there has been surge of new issues in the corporate bond market recently.
BPCL had recently raised a Rs 390 crore through a five-year non-convertible debenture issue at a coupon of 9.95 per cent -- the 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 Industrial Finance Corporation of India Ltd (IFCI) is also planning to raise Rs 50 crore via a private placement of bonds, details of which is being worked out as well.
