Rural Electrification Corporation raises Rs 2,750 crore via 2-year bond issue

MUMBAI: State-owned Rural Electrification Corporation raised Rs 2,750 crore on Thursday by selling bonds at 8.97% with a two-year maturity. This is the lowest rate offered so far by any triple A rated corporate issuer for a short tenure since the beginning of the current fiscal.

This reflects the market appetite for Indian corporate bonds, where overseas investors are betting in a big way as they have al-most exhausted investment limits in government.

“Standard Chartered Bank and Barclays Bank together picked up about half of the issue size as they sensed strong demand from their overseas clients for such bonds,” said a senior executive from one of the investment bank-ers, requesting anonymity.

About 15 arrangers in all bid for the issuance, including AK Capital, ICICI Bank, Yes Bank, Trust Investment, ICICI Securities Primary Dealerships and Nomura Financial, among others.

Both the banks bid at 8.97%, which later emerged as the cut off rate at which all bidders subscribe. Standard Chartered invested Rs 900 crore, while Barclays put in Rs 450 crore.

Standard Chartered Bank declined to comment on the matter. REC could not be reached for the story. The company scrapped plans to raise money for three years after it obtained a better price for the two-year maturity.