PFC's Rs 4,590 crore tax-free bond issue opens on Dec 14

State-run lending agency Power Finance Corp ( PFC ) said its tax-free bond issue, through which it plans to raise up to Rs 4,590 crore, will open for subscription on December 14. "The tax-free bond issue to raise close to Rs 4,590 crore will open on December 14 and close on December 21," the company said in a statement. The tranche one of the offering is likely to raise up to Rs 1,000 crore with an option to retain over-subscription up to shelf limit of Rs 4,590 crore, it said.

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The bond issue would be for a period of 10-15 years offering an interest rate between 7.19 per cent and 7.86 per cent. The bonds are proposed to be listed on the BSE. The bonds would be raised through the non-convertible debenture (NCD) route. An NCD is a type of loan-linked security issued by a company that cannot be converted into stock and usually carries a higher interest rate than a convertible debenture.

PFC plans to utilise the proceeds for lending purposes, debt servicing and working capital requirements and not for any specified project, the release said. ICICI Securities Ltd, AK Capital Services Ltd, Enam Securities, Kotak Mahindra Capital Company Ltd and SBI Capital Markets Ltd are acting as lead managers to the issue.