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NTPC raises USD 500 million from the international bond market
11 July, 2011
NTPC Limited successfully priced a USD
500million bond issue in the international markets on 7th July
2011. The Notes were issued under the USD 1 billion Medium
Term Note Programme established by the Company.
After updating its Medium Term Note Programme, the Company
conducted roadshows between 30th May and 2nd June 2011. As the
international markets turned weak in the wake of Greek debt
crisis, the Company decided to wait for the markets to
stabilize before launching the issue.
At the earliest signs of recovery in the markets, NTPC
launched a benchmark size, senior, unsecured, fixed rate 10
year bond transaction which met with overwhelming response.
The transaction was announced with an
initial price guidance of benchmark 10 year US Treasuries
[UST] plus 265bps area at the opening of Asian markets on 7th
July 2011. The order book grew at a healthy rate on the
strength of which the final price guidance was given at 255
260 bps over UST. The transaction received tremendous response
and the final order book had over 230 investors with total
order value in excess of US$ 2.7 billion. This enabled the
Company in achieving its target issue size of USD 500million
at pricing of 255bps over UST, at the tighter end of the final
NTPC last issued bonds in the international market in 2006.
The current offering from a premier Indian quasi-sovereign
provided a rare investment opportunity to the global investors
to participate in the growing Indian infrastructure sector.
Speaking on the deal, Arup Roy Choudhury, CMD, NTPC stated It
is a recognition of the pre-eminent position of NTPC by the
global investors and the confidence they repose in us to
deliver on our promises.
With a strong portfolio of projects under execution, the
Company intends to use the proceeds of the issue to finance
its ongoing and new power projects.