Psus Tap Debt Market To Raise Rs 1,400 Crore

Public sector units have entered the bond market to raise Rs 1,400 crore as part of their annual borrowing programme before the end of this fiscal.

Most of the PSU debt offerings have elicited a good response, according to ICICI Securities. Moreover, an easy liquidity situation has caused yields to drop by 100 to 150 basis points and upfront discounts offered by arrangers have vanished, it adds.

Merchant bankers describe the MTNL issue as the most interesting. The telecom company has opened a Rs 500 crore Central government-guaranteed bond issue with a 15 per cent coupon and a maturity of five years.

 

This issue is the first non-government paper to be placed on par with state government loans, thereby making it eligible for investment by provident funds. Incidentally, provident funds have responded well to it and are actively picking up the bonds.

National Housing Bank has two papers on offer to raise a total of Rs 500 crore: one five-year paper offers a coupon rate of 13 per cent while the other is a seven-year bond offering 13.5 per cent.

Bharat Petroleums Rs 200 crore bond issue has a coupon of 15.5 per cent. The annualised yield works out to 16.1 per cent and is considered very attractive given the fact that it has an AAA rating with a medium-term maturity of three years.

PowerGrid is floating a Rs 200 crore bond issue with a greenshoe option and a coupon of 15.75 per cent. The annualised yield works out to 16.37 per cent. PowerGrids bonds are rated AA+ and have a tenure of five years.