Icici Snips Return On Bonds By 25 Bps

ICICI has cut the interest rate on regular income bonds by 25 basis points in the latest tranche of its safety bonds, slated to hit the market on December 15.

The financial institution is entering the retail bond market for the sixth time this fiscal to raise Rs 400 crore in unsecured redeemable bonds with a right to retain oversubscription of up to Rs 400 crore. The issue is slated to close on December 29, 2001.

The six bonds on offer are: tax saving bond, encash bond, regular income bond, money multiplier bond, children growth bond and floating rate bond. ICICI is offering various options under these six bonds.

In the regular income bond, ICICI has reduced the interest rate by 25 basis points to vary between 9.25 to 9.75 per cent, depending upon the interest payment schedule.

Earlier, in November, the interest rate ranged from 9.5 to 10 per cent. ICICI has also pared the yield on the money multiplier bond by increasing the tenure of the longer term deep discount product.

The period has been increased to seven years and four months, from seven years and three months. Effectively, the yield on the Rs 5,000 bond, the face value of which stands at Rs 10,000, has been reduced to 9.9 per cent, from the earlier 10 per cent.

In case of the shorter term money multiplier bond, the period remains the same at four years and seven months for the Rs 5,000 bond with a face value of Rs 7,475, giving an effective value of 9.2 per cent.

The minimum investment for each bond stands at Rs 5,000.