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    REC to float perpetual bonds of up to Rs 2,000 crore

    Synopsis

    Perpetual bonds do not have a maturity date, although the call option implies that the issuer has the right to redeem the bonds on a fixed date. The appeal of such securities for investors stems from the fact that they typically pay a higher interest rate than many other fixed-income instruments.

    RECAgencies
    .Last week Power Finance Corp issued a total of ₹4,432 crore in two tranches of debt issues of three-year and ten-year maturities, sources said.
    Mumbai: State-owned power sector financier REC is likely to sell perpetual bonds aggregating up to ₹2,000 crore on Thursday, people aware of the development said.

    The sale consists of a base size of ₹500 crore and a greenshoe option of ₹1,500 crore, sources said, adding that the bonds would have a call option after 10 years.

    The bidding for the bond sale will likely be conducted from 10 am to 11 am on the BSE Bond portal on Thursday.

    Perpetual bonds do not have a maturity date, although the call option implies that the issuer has the right to redeem the bonds on a fixed date. The appeal of such securities for investors stems from the fact that they typically pay a higher interest rate than many other fixed-income instruments.

    On April 11, REC, a subsidiary of Power Finance Corp, kicked off domestic bond sales for the current financial year with three-year bonds worth ₹2,848 crore at an interest rate of 7.51%.

    Three days before, REC had tapped the international debt markets, selling $750 million of green bonds maturing in five years. The coupon for the dollar-denominated debt was set at 5.70%.

    Last week Power Finance Corp issued a total of ₹4,432 crore in two tranches of debt issues of three-year and ten-year maturities, sources said.




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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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