The non-convertible debentures, which are rated ‘AAA’ by rating firms ICRA, India Ratings and Crisil, will mature on July 31, 2026, they said.
The Power Finance Corp subsidiary had initially announced a bond sale worth up to ₹3,000 crore, comprising a base size of ₹500 crore and a green-shoe option of ₹2,500 crore.
“The coupon (the rate of interest paid out to investors) was largely on expected lines, perhaps a tad on the higher side because government bond yields are marginally up today (Tuesday) as well due to profit booking,” a treasury official said.
“Going ahead, we expect upcoming issuances around these levels with a variation of a few basis points,” the official said, adding that state-run power producer NTPC’s bond sale later this week could see a cut-off of 7.40-7.45%.
In the secondary market on Tuesday, the yield on the most traded three-year bond issued by the central government was last at 7.04%. Government bond yields are the benchmarks for pricing debt issued by corporate entities.
REC had last week tapped international debt markets, issuing $750 million of green bonds maturing in five years. The coupon for the dollar-denominated debt was set at 5.70%.Fundraising for companies through the debt capital market route has turned cheaper since last week, as the Reserve Bank of India’s unexpected decision to refrain from tightening monetary policy led to a sharp decline in sovereign bond yields.
Yields on five-year and ten-year government bonds have dropped as much as 13 and 16 basis points, respectively, since the RBI’s policy statement on April 6 as traders now feel that the central bank may not raise borrowing costs anymore in the foreseeable future. Bond prices and yields move inversely.
Largely in line with the fall in government bond yields, 3-year and 5-year corporate bond yields have eased by around 10-15 bps since the RBI’s policy, market participants said.
Over the past couple of days, however, government bond yields have risen from their lows as traders locked in profits.
