PFC's Rs1K-cr tax-free bond issue opens today

Power Finance Corporation (PFC) will start selling tax-free bonds today (December 30, 2011) to raise up to Rs1,000 crore.

'We will launch the offer to sell tax-free bonds worth up to Rs1,000 crore today. The offer will end on January 16,' PFC Director (Finance) R Nagarajan said.

The leading power sector lender has the approval to mop up Rs5,000 crore through issue of tax-free bonds. It has raised Rs967 crore already through private placement of these bonds in October and November.



'We expect good response for our offer starting today. The proceeds will be used for funding power projects,' Mr Nagarajan said.

The 10-year and 15-year bonds carry coupon rates of 8.20% and 8.30%, respectively.

The leading power sector lender also has the regulatory approval for $1 billion (about Rs4,900 crore) Medium Term Note (MTN) programme that would tap international bond market.

PFC expects to raise around Rs30,000 crore in the current fiscal. More than half of the target amount is estimated to have already been raised.

The company provides project term loans, equipment lease financing and short term loans for power projects, among others.