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ICICI Bank has issued foreign currency notes with a face value of $1 billion or about Rs 4,500 crore. This has been sold through the bank’s Dubai branch. The five and a half year tenure bonds will carry a coupon rate of 4.75%. They were issued at a price of 99.665% of the face value, which translates to a spread of 251.5 basis points over the London Inter-bank Offered Rate (Libor).
Continue ReadingInfrastructure Development Finance Company had sought to raise funds from investors for funding infrastructure projects through a second bonds issue. The government has permitted infrastructure finance companies to raise funds, from investors, for funding long term infrastructure projects. These bonds will be eligible for a tax exemption of Rs 20,000 from the taxable income, under section 80ccf of the Income Tax Act.
ICICI Bank has raised funds from its Bahrain branch, picking up about $750mn or about Rs 3,490 crore through a fixed rate note issue. The notes will carry a fixed rate of 5.5% which is 293 basis points over the London Inter-Bank Offered Rate (Libor). According to the bank, the issue got a good acceptance with bids of over $3bn. The bank has not mentioned any specific reason for raising these funds.
Short term borrowings are a part of any company’s life. These are needed to tide over temporary cash shortages or even to meet normal working capital needs. Since the needs are temporary, companies do not mind paying a slightly higher rate of interest. But when governments start dipping into the till to meet short term requirements, the consequences can be interesting, if not disruptive.
The government yesterday issued bonds worth Rs 21,942 crore to the oil marketing companies to compensate for the losses incurred by them. IOC got about 54% of the total bonds while BPCL was issued nearly a fourth and HPCL the rest. These bonds have a coupon of 6.9% and mature in 2026. Since the oil marketing companies have little leeway in fixing prices of petroleum products resulting in losses, especially on the sale of kerosene and LPG.
The government gave oil marketing companies something to cheer before they prepare the third quarter’s results. They have got bonds to compensate them for the losses incurred on selling retail petroleum products like PDS kerosene and LPG. Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation have been issued bonds worth Rs 22,000 crore, with the companies getting 54.4%, 24.2% and 21.3% respectively.
December has been a good month for fertiliser companies. Earlier this month, the government had issued 7% bonds worth Rs 10,000 crore to 23 companies. Now the government has released another tranche of 6.2% bonds worth Rs 4,000 crore to 16 companies. These bonds are not eligible to be kept with banks as SLR but can be bought by insurance companies, in the ‘other approved securities’ list and as special bonds by PF/Gratuity/Superannuation funds.
Continue ReadingThe government has issued 7% fertiliser bonds worth Rs 10,000 crore to 23 companies, representing the subsidy given during FY09. These bonds are not eligible to be kept with banks as SLR but can be bought by insurance companies, in the ‘other approved securities’ list and as special bonds by PF/Gratuity/Superannuation funds. Moreover, they can also be eligible for repo transactions.