Icici Raises Coupon Rates On Retail Bonds

ICICI has raised the coupon rates of some of its instruments offered under the forthcoming bond issue, slated to hit the retail market on October 3.

The term-lending institution will make the third public offering of unsecured redeemable bonds this fiscal, under the umbrella prospectus, to mop up Rs 500 crore. The Rs 250-crore issue carries a 100 per cent greenshoe option.

On offer are three instruments -- tax saving bond, regular income bond and money multiplier bond. The FI has made some changes in the regular income bond and money multiplier bonds. In the regular income bond, the tenure has been increased to five years with an annualised interest rate of 11.40 against a tenure of 4 years with an interest rate of 11 per cent. The yield of the money multiplier bond has been increased by 20-30 basis points. The issue will close on October 17.

 

ICICI had floated the first tranche of the bond issue on August 3. The second issue closed on September 12.

The tax-saving bond offers an yield of 10.50 per cent payable annually for three years along with a deep discount bond option. Under both these options, the investors can avail of tax benefits under Section 88.

The regular income bond which has a maturity of five years has three options-- a coupon of 10.75 per cent payable monthly, 11.00 per cent payable semi-annually or 11.40 per cent payable annually.

The money multiplier bond offers five options which include 11.1 per cent yield for three years 10 months, 11.4 per cent for six years and five months and 11.6 per cent for 10 years. There are options for 14 years and eight months and 20 years and 11 months.

According to an ICICI official, "In the money multiplier bonds the tax can be paid in the end of the tenure thus deferring the tax,. This helps in getting a better yield on the instrument as longer the tenure better is the yield."