NHB Issues 10-Year Bonds First Time In A Decade At Slightly Higher Rate Of 7.14%
Proceeds of the 10-year bond issue will be used for lending towards housing finance companies and for refinancing affordable housing assets, said a person involved in the transaction said.
National Housing Bank tapped the bond market with a 10-year bond issue after a decade on Thursday at a coupon of 7.14%, four people in the know told NDTV Profit.
The regulator to housing finance companies raised Rs 3,830 crore, lower than Rs 5,000 crore that it initially planned to borrow as demand from one of the largest investors was at elevated levels, a person in the know said.
The issue had a base size of Rs 2,000 crore and a greenshoe option of Rs 3,000 crore.
The coupon was slightly higher than market's expectations of 7.05-7.10%.
The housing financier received 114 bids in the range of 6.90-7.28%, according to the bid book accessed by NDTV Profit.
Insurance companies, Life Insurance Corp of India, Employees' Provident Fund Organisation, pension funds and few private sector banks were said to have been the major investors of this bond issue, the person said.
Proceeds of the 10-year bond issue will be used for lending towards housing finance companies and for refinancing affordable housing assets, the person involved in the transaction said.
The bonds are rated AAA by CRISIL Ratings and will be allotted on Nov 19.
In 2014, the regulator of housing finance companies had raised Rs 2,100 crore through public issue of tax-free bonds maturing in 10, 15 and 20 years. This was the last time it had raised long-term funds.
Usually, NHB raises funds up to seven-year maturity bracket. However, strong demand from insurance companies and pension funds amid tight rates in the longer-tenure segment drove NHB to opt for a 10-year bond.
So far in the current financial year, NHB has hit the bond market four times, raising a total of Rs 12,200 crore, through bonds maturing in three to seven years.
