Tag: PFC

PFC issues India’s first ever Euro-denominated green bonds

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Power Finance Corporation (PFC) launched its maiden €300 million 7-year Euro Bond issuance on September 13 which got oversubscribed 2.65 times by institutional investors across Asia and Europe, the company said Thursday in a statement. The pricing of 1.841 per cent achieved is the lowest yield locked in by an Indian issuer in the Euro markets, it added.

“It is not only the first Euro bond issuance by PFC but also the first ever Euro-denominated Green bond issuance from India. Moreover, it is the first Euro issuance by an Indian non-banking finance corporation(NBFC) and the first Euro bond issuance from India since 2017,” the release further added.

“The overwhelming response to the issuance reflects international investors’ confidence in PFC. This issuance also demonstrates our commitment for achieving India’s renewable energy goals. Further, this bond issuance would help PFC in diversifying its currency book as well as the investor base,” Chairman and Managing Director, RS Dhillon, PFC said.

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PFC raises $500 million through bonds issue

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Power Finance Corporation (PFC) has raised $500 million (₹3,650 crore) through the issuance of dollar-denominated bonds under Reg-S route of the US Securities Act on January 29. The bonds have a fixed maturity of May 16, 2031, making them the longest tenor issue from India this year.

The notes were priced on January 21, and the issue was oversubscribed by 5.1 times, with the order book amounting to around $2.55 billion, PFC said in a statement. The bonds have a fixed coupon of 3.35 per cent per annum. They will be listed on the Singapore Exchange Securities Trading Limited, NSE IFSC and India INX.

“The proceeds from bonds will be utilized in accordance with the external commercial borrowing regulations of the Reserve Bank of India including for on-lending to power sector utilities,” PFC said. The union budget has provided an outlay for a ₹3.06 lakh crore financial assistance scheme to utilities.

This issue by PFC is separate from the ₹10,000 crore that the power sector NBFC is raising through its maiden bond issue of taxable non-convertible debentures, the first tranche of which, for ₹5,000 crore, was opened on January 15 and closed on January 29, according to the company’s prospectus.

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Power Finance Corp’s ₹4,500-cr NCD issue to hit market on Jan 18

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Power Finance Corporation (PFC) will hit the market on January 18 with a ₹4,500-crore non-convertible debenture (NCD) issue for retail investors.

This will be the first tranche of the ₹10,000 crore worth NCD issuance that PFC plans to make this quarter and for which a draft shelf prospectus has already been filed with regulatory authorities, sources close to the developments said.

The fund mobilised is likely to be used for lending to the power sector besides fulfilling some of the obligations cast on PFC under the recently announced Atmanirbhar stimulus package, it is learnt.

Indications are that a separate prospectus for the first tranche will be filed with the Registrar of Companies next Monday. Each NCD will have a face value of ₹1,000 and the coupons offered on them are going to be higher (likely to go up to 7.5 per cent) than the fixed deposit rates offered by banks. The tenor of the bonds could be varying, up to 10 years.

Thanks to the huge monetary stimulus unleashed by the RBI and other central banks around the world, there is gush of liquidity in the Indian financial system, bringing down the deposit rates offered by banks. For instance, a three-year term deposit of SBI offers 5.3 per cent annual interest, which is the lowest since September 2004.

Taxable instrument

Unlike in the past, when PFC offered tax-free bonds to individual investors, the latest NCD issue will be taxable, sources said. This may temper down the net yield that investors could look for in the NCDs, which have been rated ‘AAA’.

Based on the response to the first tranche, the next could be rolled out within a fortnight, sources said. In all, PFC wants to complete the mop-up in three tranches and there is also a greenshoe option available to the state-owned infrastructure lender.

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