Edelweiss Financial’s Rs400 cr NCD issue to offer up to 9.70% interest
Premium- The company will look to raise Rs400 crore from the issue, which has been rated A+ by Icra Ltd and AA by Acuite Ratings and Research Ltd
Edelweiss Financial Services Ltd (EFSL) on Wednesday announced a public issue of secured non-convertible debentures (NCDs), which will offer an effective yield of up to 9.70% to investors. The company will look to raise ₹400 crore from the issue, which has been rated A+ by Icra Ltd and AA by Acuite Ratings and Research Ltd.
The NCD, which will open for subscription on 17 August and closes on 6 September, has a base issue size of ₹200 crore with an option to retain oversubscription up to ₹200 crore, aggregating up to ₹4,000 crore.
The issue by Edelweiss Financial are secured, which means that in the event of liquidation, secured investors will get the first preference.
At least 75% of the funds raised through the issue will be used for the purpose of repayment or prepayment of interest and principal of existing borrowings of the company and the balance is proposed to be utilized for general corporate purposes. The NCDs will be listed on BSE Ltd.
There are eight series of NCDs carrying fixed coupon and having tenure of 36 months, 60 months and 120 months with annual, monthly and cumulative interest option. The effective annual yield for NCDs will range between 9.09% and 9.70%.
Moreover, an additional incentive of up to 0.20% per annum will be offered to investors who are also holders of NCDs, or bonds previously issued by Edelweiss Financial Services, or its group companies, such as ECL Finance Ltd, Edelweiss Housing Finance Ltd, Edelweiss Retail Finance Ltd and Edelweiss Finance & Investments Ltd.
The NCDs proposed to be issued under the issue have been rated AA with a negative outlook by Acuite Ratings and Research and A+ with a negative outlook by ICRA Ltd. As per experts, these ratings mean that the debentures carry low credit risk but are not as safe as AAA-rated instruments.
MINT PREMIUM
See All
Never miss a story! Stay connected and informed with Mint. Download our App Now!!