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Friday, January 27, 2012

Tax-free Bonds : Hudco, IRFC

IRFC (Indian Railway Finance Corporation) & Hudco (Housing and Urban Development Corporation), are tapping the bond market to raise about via Tax free bonds Rs. 11,000 crore starting from January 27, 2012.

Both, IRFC &  Hudco, are launching their public issue of tax-free, secured, redeemable, non-convertible debentures on January 27, with coupon rate ranging  8% to 8.20%

In case of IRFC, the company is offering coupon rate of 8% per annum for tranche-1 series bonds with a maturity of 10 years and 8.10% per annum with a maturity of 15 years. The issue opens on January 27 and closes on February 10, 2012.

IRFC intends to utilise the issue proceeds for financing the acquisition of rolling stock and financing the capacity enhancement works in the Indian Railways.

Hudco is offering 8.10% for tranche-1 series 1 bonds and 8.20% for tranche-1 series 2 bonds on per annum basis. The issue opens on January 27 and closes on February 6, 2012.

Lead managers to IRFC’s tax-free bond issues are SBI Capital Markets, AK Capital & ICICI Securities.

Lead managers to Hudco’s public issue of bonds are Enam Securities and SBI Capital Markets..

Following the issue, both the tax free bonds would be listed on the NSE (National Stock Exchange) & BSE (Bombay Stock Exchange).

Rating firm CRISIL has assigned ‘AAA/Stable’, while ICRA and CARE have given `AAA' rating for IRFC, indicating highest safety for timely servicing of debt obligations.

For Hudco, credit rating firms CARE and FITCH have assigned `AA+' rating.

Recently, NHAI (National Highway Authority of India) through tax-free bonds, where, it mopped up Rs 10,000 crore, though, the issue got applications for Rs 12,000 crore.
Another one  government controlled company PFC (Power Finance Corporation) is raising Rs 5,000 crore via tax-free bonds, while REC (Rural Electrification Corporation) may float a Rs 4,000 crore bond issue by March (2012) end.

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