Power Finance Corporation (PFC) is set to raise over Rs 3,000 crore through a mix of instruments from the domestic and international markets. The plan includes tapping private and multilateral sources.
PFC will soon enter the European market to raise $125 million in external commercial borrowings, besides seeking a $500 million loan from the World Bank. It will also raise Rs 400 crore from the domestic market through a debt issue. At a later date, the corporation plans to raise another $125 million from the international markets for which the instruments are yet to be identified.
ING-Baring has been appointed the lead manager to the Euro bonds issue. The dollar-denominated bonds are to be issued at par, with the interest being fixed at US rates. Sources say the bonds will have a maturity of 10 to 12 years.
The roadshow for the issue will get underway once the finance ministry gives its approval. The price of the bonds will be indicated only after the roadshow.
The Euro bonds issue will be the first instance of PFC raising non-syndicated debt from the international market. The corporation had in January this year raised $75 million in syndicated debt from the international market. PFC sources are confident of getting a good price for the Euro bonds. The $500 million loan that PFC has sought from the World Bank will be used to fund power-related projects in states where the World Bank is not directly involved. The Bank is advancing the loan with the understanding that it will be used only in reform-oriented states.
