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Business & Economy
Long-term bond for metro
project rail coming soon
What is India News Service, Tuesday, 15 February 2005, 2000 hrs IST
The Central and Karnataka governments will jointly float a 30-year bond for the Bangalore metro rail.
The domestic debt market is set to see the debut of the longest maturity corporate bond. A special purpose vehicle (SPV), the first of its kind to be floated jointly by the government of India and the Karnataka government, will float a 30-year bond for the Bangalore metro rail project. UTI Bank will manage the issue.
The SPV, Bangalore Mass Rapid Transit Road, has been jointly floated by the state and the Central governments for raising funds. According to market sources, the SPV will borrow Rs 800 crore from the debt market with the 30-year paper.
The longest maturity paper available in the market now has a remaining term of 17 years. Floated by the Power Finance Corporation, it is a zero-coupon bond that matures in 2022.
Reliance Industries has raised resources through longer dated paper, but these were overseas issues.
The project cost of Rs 6,000 crore will be met equally through equity and debt. The borrowing will consist of a term loan from banks, besides the Rs 800 crore bond issue. Sources said Rs 2,200 crore would be raised as a term loan from a bank.
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