NTPC Raises Rs 2000 cr Through Masala Bonds

Axis Bank, Barclays Bank, ICICI, MUFG, and Standard Chartered Bank were the bookrunners for the offering.

NTPC Raises Rs 2000 cr Through Masala Bonds

Team EnergyInfraPost

India’s largest power generating company, NTPC Ltd on Wednesday raised Rs 2000 crore through rupee denominated bonds or masala bonds. This forms part of NTPC’s $4 billion medium term note programme for funding its capital expenditure needs.

The net proceeds from each issue of Notes will be used by NTPC to finance capital expenditure of ongoing and/or new power projects and renovation and modernisation of its power stations in India. No proceeds will be used for any of the company’s projects outside India, NTPC said.

This was NTPC’s second INR denominated 5-year Masala Bonds offering in the international markets. With this NTPC becomes the only State Owned Enterprise to tap Masala Bonds market twice.

A NTPC statement said the Notes carry a coupon of 7.25% per annum payable annually. “The Notes will mature on 3rd May 2022 and all INR principal and interest payments will be made in U.S. Dollars. The Notes are expected to be settled by 3rd May, 2017,” it added.

The masala Bonds represent direct, unconditional and unsecured obligations of NTPC and will rank pari passu among themselves and all other unsecured obligations of the Issuer.

The Notes will be listed on the Singapore and the London stock exchanges.

The net proceeds from each issue of Notes will be used by NTPC to finance capital expenditure of ongoing and/or new power projects and renovation and modernisation of its power stations in India. No proceeds will be used for any of the company’s projects outside India, NTPC said

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This is the eighth offering under the company’s US$ 4billion Medium Term Note (MTN) programme since it was set up in 2006, taking the cumulative amount raised under the programme to US $ 3.46 billion (approx.).

Given the strong credentials of NTPC in the International Bond Market, the issue was oversubscribed with participation of more than 40 accounts and based on the strong order book the Notes have been successfully priced at a coupon of 7.25% payable annually.

The 5 year Senior Unsecured RegS Masala Bonds of NTPC have been issued at the lowest yield for any Masala bond by an Indian issuer till date and have been priced within AAA Corporate Bonds of equivalent tenor in domestic market.

In terms of geographical distribution, Asia took the bulk of the transaction at 83% EU area at 14% and US Offshore 3%. In terms of investor types – Central Bank / Sovereign Wealth Funds comprised 50%, Asset Managers/ Fund Managers 30%, Banks 14% and Private Banks 6%.

The Company intends to use the proceeds of the issue to finance its ongoing and new power projects within India.

Axis Bank, Barclays Bank, ICICI, MUFG, and Standard Chartered Bank were the bookrunners for the offering.

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