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PFC raises $750 million through dollar-denominated bonds

PFC said it raised $750 million through issuance of dollar-denominated bonds and is the first Indian public sector company to do so
New Delhi: State-run PFC (Power Finance Corporation) said on Friday that it raised $750 million through issuance of dollar-denominated bonds. The company carried out the issuance of 10.25 year $750 million bonds on under Reg S & 144 A route. The bonds have a fixed coupon of 3.95 percent per annum and a yield of 4.066 percent, an official statement said. The statement added that PFC is the first Indian public sector company to issue senior unsecured USD bonds with a tenure of more than 10 years.

PFC will use proceeds from bonds for on lending

The value of the final order book, which stood at more than $2.2 billion, helped in attracting active and wider participation from investors across US, European and Asian markets, with around 42 percent participation from the US market, PFC said. The proceeds from the bonds will be utilised in accordance with the external commercial borrowing regulations of the Reserve Bank of India (RBI), including for on lending to power sector utilities.

This is PFC’s 3rd international bond issuance

This is PFC’s third international bond issuance in FY20 and its largest single tranche bond. Currently, under the PFC borrowing programme of $12 billion for FY 19-20, the total foreign currency raised stands at around $3 billion, while the domestic currency is around $7 billion. Commenting on the outcome of the bond issuance, PFC Director Rajeev Sharma said that the deal concluded at very attractive terms, which shows investor confidence in company’s business, credit profile and the growth story of Indian power sector.