India's REC raises short-term funds at more than 8% for first time in seven years

REC

Yesterday 10:31

By Dharamraj Dhutia
MUMBAI, Oct 27 (Reuters) - India's REC RECM.NS raises shorter-duration funds at more than 8% for the first time in over seven years, paying 100 basis points more than what it had offered for a similar bond issue over three months earlier, three merchant bankers say.

Here are a few details: 
REC accepts bids worth 40 billion rupees ($420.5 million) for five-year bonds at a coupon of 8.30%
REC is one of the largest issuers of corporate debt, and its issuances are generally considered a benchmark rate for other firms
REC had last paid a coupon of above 8% for three-year bonds in June 2019
For a similar-maturity bond offering in the middle of July, REC was able to garner funds at 7.30%
REC becomes the third state-run entity after SIDBI and NABARD to raise fresh funding at more than 8% in October
Spread over corresponding government bond on an annualised basis jumps to more than 80 basis points, compared with 70 bps in July 
AAA-rated firms continue to tap the domestic bond market despite rising yields, as bond financing is still relatively cheaper than bank loans - Venkatakrishnan Srinivasan, founder and managing partner of debt advisory firm Rockfort Fincap

($1 = 95.1150 Indian rupees)

 (Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)
 ((Dharamraj.Dhutia@thomsonreuters.com;))