REC, IRFC may raise $600 million via dollar bonds
, ET Bureau|
Updated: Dec 04, 2017, 08.23 PM IST
Mumbai: Public sector financiers Rural Electrification Corp (REC) and Indian Railway Finance Corp (IRFC) could together raise at least $600 million by selling dollar bonds to investors in Asia and Europe in the next ten days, three people familiar said.
REC is kicking off road shows to sell the issue to investors in Singapore, Hong Kong and London on Wednesday, while IRFC completed its roadshows last week and is expected to put the bonds for sale later this week, one of the people cited above said.
REC is raising the money to refinance its foreign loans maturing in early next year, while IRFC’s bonds will have the ‘green bond’ tag because the funds will be used to buy electrified coaches which are considered environmentally friendly.
“Both these companies have to raise the money in the next ten days because after that the Christmas holiday season takes over in Europe and there are very few trades,” said a banker aware of the deal. REC is likely to raise $300 million through a three year bond sale as part of its $1 billion medium term note programme.
Rating agency Moody's has assigned a Baa3 rating to REC’s bonds, just a notch below India’s Baa2 rating. “The rating takes into consideration our assessment of the strong link between REC and the Government of India. The standalone strength of REC is supported by its operating track record and its status as the preferred lender to state-run power utilities, its captive franchise in the financing of rural electrification projects, as well as power transmission, distribution and generation,” Moody’s said.
IRFC which finished their road shows last week is looking to raise $300 million to $500 million by selling green bonds maturing in ten years. “Both these companies are looking to raise money before US interest rates rise further while taking advantage of India’s rating upgrade last month. They want to use this window before the holiday season,” said a second person familiar with the deals.
In June REC had raised $450 million by selling green dollar bonds at 3.88%, while IRFC had last raised dollar funds in February 2014.
REC is kicking off road shows to sell the issue to investors in Singapore, Hong Kong and London on Wednesday, while IRFC completed its roadshows last week and is expected to put the bonds for sale later this week, one of the people cited above said.
REC is raising the money to refinance its foreign loans maturing in early next year, while IRFC’s bonds will have the ‘green bond’ tag because the funds will be used to buy electrified coaches which are considered environmentally friendly.
“Both these companies have to raise the money in the next ten days because after that the Christmas holiday season takes over in Europe and there are very few trades,” said a banker aware of the deal. REC is likely to raise $300 million through a three year bond sale as part of its $1 billion medium term note programme.
Rating agency Moody's has assigned a Baa3 rating to REC’s bonds, just a notch below India’s Baa2 rating. “The rating takes into consideration our assessment of the strong link between REC and the Government of India. The standalone strength of REC is supported by its operating track record and its status as the preferred lender to state-run power utilities, its captive franchise in the financing of rural electrification projects, as well as power transmission, distribution and generation,” Moody’s said.
IRFC which finished their road shows last week is looking to raise $300 million to $500 million by selling green bonds maturing in ten years. “Both these companies are looking to raise money before US interest rates rise further while taking advantage of India’s rating upgrade last month. They want to use this window before the holiday season,” said a second person familiar with the deals.
In June REC had raised $450 million by selling green dollar bonds at 3.88%, while IRFC had last raised dollar funds in February 2014.
