India Infrastructure Finance Company (IIFCL) has kicked off work on a $1 billion (Rs 4,600 crore) medium term note programme to raise resources for funding power, road, port and airport projects.

The New Delhi-based financial institution was in the process of appointing legal counsels for setting up the programme, said sources close to the development.

Also Read   Related Stories News Now - Come into my parlour - High and mighty - Cooperative banks in Hry to provide loans of Rs 8,600 cr - Undisbursed loans may lead to rate war, even if RBI tightens - TN seeks upper ceiling on sugar, tur - The Strategist Quiz (#135)

Also Read   Related Stories News Now - Markets end on a strong note - Axis Bank ties up with Bahrain's bank for remittance - Airtel rating unaffected by Qualcomm deal: Fitch - Lanco may exit road segment to focus on power generation - Ranbaxy gets US nod for acne treatment More

While State Bank of India, ICICI Bank and Axis Bank recently raised funds as part of the MTN programme, Bank of Baroda postponed its plans of a bond issue as spreads widened. The cost of borrowing depends on the prevailing rate in the London inter-bank offered rate (Libor), the global benchmark rate, and the spreads. The spreads, which reflect the risk perception, had widened in the wake of fears of fresh defaults in Europe. Bank of India is also in the process of raising funds through overseas bond issues.

Over the last few months, SBI, the country’s largest lender, has raised $850 million (Rs 3,910 crore) through fixed-rate senior notes under the MTN programme. In the first tranche of $750 million (Rs 3,450 crore), the coupon rate was 4.50 per cent. These bonds, which kicked off interest among other players, have a maturity of five years. ICICI Bank, too raised $750 million (Rs 3,450 crore) in November through a bond issue that was primarily used for repayment of bond maturity earlier in the month.

Sources said that IIFCL was not in a hurry to launch its MTN programme as it had sufficient resources at its disposal including the Rs 10,000 crore for refinance and funds raised from multilateral institutions such as World Bank and Asian Development Bank.

Last month, the financial institution tied up $2.4 billion (Rs 11,040 crore) from the two agencies. During the last financial year, the company had disbursed Rs 3,200 crore to various projects and had also doubled its target for 2009-10.

New Ipad Application :Business Standard's all new IPad App Click here to download for free Other Stories      - Markets end on a strong note - Axis Bank ties up with Bahrain's bank for remittance - Airtel rating unaffected by Qualcomm deal: Fitch - Lanco may exit road segment to focus on power generation - Ranbaxy gets US nod for acne treatment

Tags : IIFCL   Read Business news in  Advertisements -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  Journey on, We are by Your Side. Click here to know more -  Help a Child Achieve her. Click to know more -  2 Lac Apartments, 1 Lac House / Plots. Click here -  Benefits Upto Rs. 2.36 Lakhs on the Fully Loaded TJet Petrol. -  Watch The Film Here. Click here to know more.. -  Leader in Passenger Car & Automobile Tyres. Click here -  1 billion in saving for Unilever without any tangles. -  Learn How One City is Running on FOOD SCRAPS. -  One Partnership Endless Possibilities. Click here to know more -  Helping doctors detect diseases earlier, saving costs & extending lives. -  36 Lakhs can get you a pool of Luxuries. Click here -  Which is the best plan for your daughter -  Check out the TRUE COLOURS of your Stocks, Now for FREE! -  One of the leading business schools in the world.Know More