Pimpri Chinchwad Municipal Corp raises Rs 200 cr via 5-year maiden municipal bonds

Municipal Bonds

Pimpri Chinchwad Municipal Corporation (PCMC) on July 28 said it has raised Rs 200 crore through maiden municipal bonds maturing in five years.

A municipal bond is a debt instrument issued by a municipal corporation under municipal laws with the permission of the respective state government.

The corporation will deploy these funds for the development of the Mula river from Wakad Bypass to Sangvi Bridge under the Pune River Rejuvenation Project, it said in a press release.

The corporation set 8.15 percent coupon on these five year bonds. “The issue was at a spread of 34 basis points (bps) over corresponding AA+ PSU FIMMDA,” PCMC said.

PCMC will be eligible to receive an incentive of Rs 26 crore from the Union Government for issuing its first municipal bond, it also added.

“There are monetary and non-monetary benefits to going for municipal bonds,” said PCMC Commissioner Shekhar Singh was quoted saying in the release.

On January 12, Moneycontrol citing officials reported that the corporation is planning to raise Rs 200 crore through its maiden municipal bonds issue and garnered funds will be utilised for development works.

The bonds holds ‘AA+’ ratings with ‘Stable’ outlook from CRISIL and CARE ratings.