REC to raise $400m through dollar bonds

State-run Rural Electrification Corporation (REC) is in the international bond markets with a benchmark issue to raise at least USD 400 million in three-year dollar money.
"The Corporation is in the US dollar market with a USD 400 million, three-year drawdown. The issuer has given an initial price guidance of 175 basis points over the US treasury," a source at one of the investment bankers told PTI today.
The corporation will price the issue towards the end of the Western market hours today, the source said, adding this is part of its USD 1 billion medium-term note programme.
It can be noted that ahead of the US Fed's almost certainly expected rate hike later this month, a number of domestic companies have been tapping the foreign debt market lately.

In October, domestic corporates had snapped up close to USD 4.8 billion in overseas debt, according to data from the central bank.
Last week, ICICI Bank had raised USD 500 million in 10-year dollar money through its Dubai branch as part of its USD 7.5 billion medium-term notes programme. The issue was priced at 3.833 per cent.

The country's largest private sector lender is also reportedly planning to tap the overseas debt market with a USD 500 million drawdown to cash in possible refinancing opportunities from domestic companies which have borrowed in foreign currencies in the past.
The move comes after the Reserve Bank allowed lenders to borrow in foreign currencies, announced in its December 6 monetary policy, to help refinance domestic companies' forex debt. Meanwhile, global rating agency Moody's has assigned a Baa3 rating to Rural Electrification Corporation' proposed senior unsecured notes with a stable outlook.

"The bonds will have a maturity of three years and will be listed on the Singapore Exchange Securities Trading and the International Securities Market of the London Stock Exchange, Moody's said in a note today.
Government owns 58.32 per cent in the company and its assets stood at Rs 2.2 trillion as of September-end.
The REC counter closed 1.08 per cent down at Rs 151.35 on the BSE, whose benchmark Sensex rallied 0.62 per cent today.