Power Finance Corporation's $750-million bonds gets over-subscribed

First government company to issue bonds with more than 10 years tenure

Leading lender for the power sector, Power Finance Corporation Ltd (PFC), concluded the issuance of bonds worth $750 million of tenure 10.25 years on Friday. The bonds have a fixed coupon of 3.95 per cent per annum and yield of 4.066 per cent. 

With this bond issuance, PFC becomes the first Indian public sector company to issue senior unsecured US Dollar bonds with a tenure of more than 10 years, said the company in a public statement. 

This is PFC’s third international bond issuance in FY19-20 as well as the largest bond in a single tranche. The final order book amounted to more than $ 2.2 billion, said the company. “The bond issuance attracted active and wider participation from investors across US, European and Asian markets, with around 42 per cent participation from the US market,” said PFC in its statement.

The proceeds from bonds will be utilised in accordance with the external commercial borrowing regulations of the Reserve Bank of India including for on lending to power sector utilities, it said. 

Of the total borrowing programme of PFC of $12 billion for 2019-20, the total foreign currency raising now stands at around $3 billion and balance is domestic raising.  

“I am happy that PFC’s bond offer saw a strong demand in the international market and the global investors have chosen to contribute to the development of Indian Power Sector. The deal concluded at very attractive terms, which shows the high confidence of investors in PFC’s business as well as its credit profile and the growth story of Indian Power sector,” said PFC chairman and managing director Rajeev Sharma.