Power Grid plans maiden overseas bond issue, to raise $500 mn

MUMBAI: State-owned Power Grid Corporation of India plans to raise $500 million through a maiden overseas bond issue in the first week of December, company executives told ET.

The central power transmission utility would use the fund raise to part finance its Rs 20,000 crore capital expenditure planned for 2012-13. The bonds would be sold in Asia and Europe.

“The spreads on bonds have narrowed and the market looks attractive for raising funds. It will help us raise funds at cheap rates,” said RT Agarwal, director (finance). “We believe we will be able to price it at a spread lower than that of BPCL’s bonds,” he said.

In October, BPCL raised $500 million via its maiden overseas bond issue at a competitive coupon rate of 4.625%. The bond, which was subscribed 15 times, had had a spread of 2.90% per annum over the 10-year yield on US Treasury note.