Idbi To Redeem 1992 Bond On March 31

The Industrial Development Bank of India (IDBI) will exercise call option to its 1992 deep discount bonds on March 31 and redeem Rs 1,800 crore well ahead of maturity. The objective is to cut the high cost of borrowing.

By retiring the high cost debt with rate of interest of 15 per cent, IDBI will save an interest cost of around Rs 100 crore annually.

Over the last two years, the institution has exercised call option to retire old high cost debt of around Rs 4,000 crore.

The investors of the deep discount bonds will be given option to invest the proceeds of the instrument in IDBI Suvidha Account or in the money multiplier bond of next Flexibonds issue of (Flexibonds Series 13) the FI, a senior IDBI official said.

 

The Suvidha account of IDBI offers interest rate in the range of nine per cent (for one year) to 10 per cent (for five years).

The money multiplier bond will provide the opportunity to the investors to double their money by six year three months.

The Flexibonds 13 series will hit the market in the middle of this month and will remain open till the first week of April.

The issue will have a notified amount of Rs 250 crore with a 100 per cent greenshoe option. IDBI will replace growing interest bonds with a step-up interest rate structure with money multiplier bonds.

Flexibonds issues are rated