NTPC hits foreign debt market with $500 mn issue

State-run utility NTPC on Wednesday hit the overseas debt market with a benchmark dollar-denominated bond sale issue to raise about $500 million as a part of its $2 billion medium-term note programme.

The 10-year fixed-rate unsecured bonds are being sold to global investors except resident Americans (Regulation S notes), multiple sources at the merchant bankers told PTI.

This is the third overseas bonds sale by a domestic firm within a week after ICICI Bank's $95 million or 600 million yuan dim sum bond sale last week and Axis Bank's $500 million dollar-denominated bond sale on Monday.

The state-run power firm has given an initial price guidance of 230 bps over the US 10-year treasury bills, the sources said.

A company official in New Delhi confirmed the move and said the proceeds will be used to meet capex plans, developing coal mines and ongoing projects.

The nation's largest power producer has under-construction projects worth over 23,000 mw.

The sources at the investment bankers which include Barclays, HSBC, Deutsche Bank, Citi and SBI Caps said the bonds will be listed on the Singapore Stock Exchange.

Rating agency Fitch has given BBB- rating to the issue, in line with the sovereign ratings as the company is owned by the government.

"We have assigned NTPC's notes an expected rating of BBB- and said the rating is a notch below its standalone profile of BBB as its ratings are constrained by the fact that the government is the largest shareholder with 75 per cent holding," it said.

On Tuesday, Essar Steel's Canadian arm Essar Steel Algoma said it concluded a $1.4-billion to refinance its rupee debt. Reliance Infocom (RelJio) has tied up a whopping $1.5 billion from a dozen-odd foreign banks.

In all domestic companies tied up a whopping Rs 20,000 crore in just two days, including Tata Power and state-owned MTNL together raising Rs 3,000 crore. To repay its existing debt, telecom operator MTNL on Wednesday raised about Rs 1,500 crore by selling bonds, while Tata Power on Tuesday raised Rs 1,500 crore by issuing non-convertible debentures.