REC to raise USD 1-bn through corp bond issue in US in FY 12

MUMBAI: State-run Rural Electrification Corporation (REC), plans to raise around USD 1-billion in 2011-12 through a corporate bond issue in the USA, a senior company official said.

The Corporation has recently raised USD 500-million through a bond issue in the international market.

"We are looking at foreign markets for raising funds. We have proposed to raise around USD 1-billion in FY 12 through a bond issue in the US. A team may go there to have the initial feedback," REC Chairman and Managing Director, Jairaj Phatak, told reporters here.

International markets are more attractive than India, he said.

"India is no longer an attractive market. We are therefore looking at international markets for raising funds either through external commercial borrowings (ECBs) or corporate bond issues. Presently, we have enough money to achieve our target of Rs 24,000-crore worth disbursements this year," he said.

On infrastructure bonds, Phatak said, "till now there has not been much response for such bonds from people because today the interest rates of banks have also increased. But we believe that in the last two weeks of March we will get more response from people who are looking for tax benefits."

When asked about its banking foray, Phatak said, "the Power Finance Corporation (PFC) has appointed a consultant and we expect the report to come soon. Even the RBI's guidelines on banking licenses are not yet out. When it is out, PFC and REC will apply together."