The bonds would be of 10-year maturity, with a yield of 9.5-10 percent
The bonds would be of 10-year maturity, with a yield of 9.5-10 percent, the report said. The rate would be about 50 basis points (100 bps = 1 percentage point) higher compared to its last long term bond sale in July-August.
DHFL's move comes at a time when housing finance companies (HFCs) and non-banking financial companies (NBFCs) are facing a liquidity crisis. This has widened the differential between the benchmark and corporate bond yield.
Life Insurance Corporation of India (LIC) is expected to subscribe to these bonds, which may open for a subscription this week, on the electronic bidding platform of stock exchanges, sources told the paper.
On November 5, DHFL repaid commercial paper (CP) worth Rs 1,775 crore. Since September 21, it has repaid CP holders Rs 9,465 crore, including a buyback worth Rs 3,240 crore, the company said in a statement.
"DHFL has taken strong steps to rebalance its loan growth profile, maintain sufficient liquidity and strengthen its core balance sheet," said Kapil Wadhawan, CMD, DHFL, in a statement.
Moneycontrol had earlier reported that the Department of Economic Affairs (DEA) had feared a 'significant default' from large NBFCs and HFCs in the next six weeks, if additional liquidity support is not forthcoming.
In an October 26 letter to the Ministry of Corporate Affairs (MCA) discussing the financial stability impact of the IL&FS default, DEA described 'the financial situation (as) still fragile'.
According to the report, Indiabulls Housing Finance was also planning to raise Rs 2,500 crore in two separate bond sales. Insurance companies, banks and mutual funds were expected to be the likely buyers of these bonds.
The Clearing Corporation of India (CCIL) data shows that Can Fin Homes, Shriram City Union, HDB Financial, Magma Fin Corp, Muthoot Fin Corp, Piramal Enterprises, Axis Finance, IIFL Wealth Finance and Tata Capital have also tapped the market to raise capital.