REC launching Yen bonds this week to raise Rs 2500 crore

NEW DELHI: REC, one of many largest state-sponsored infrastructure financiers, will launch an providing of Yen bonds this week to lift a minimum of Rs 2,500 crore, in accordance with individuals conscious of the matter. It has filed providing particulars with inventory exchanges in Tokyo, London, Singapore and New York.

REC has opted for a Regulation S providing which is able to make it compliant with US legal guidelines with out the necessity for the corporate to register with the inventory market regulator there. The providing might be open to a number of buyers who spend money on Yen-denominated securities based mostly in and out of doors Japan.

Japan has maintained unfavourable rates of interest on account of financial contraction in that nation. It expects this may encourage individuals to borrow and thereby stimulate financial exercise. This implies borrowing in Yen might be cheaper for worldwide firms seeking to increase cash in that foreign money. However market watchers are of the view that Yen buyers are picky and usually again A-rated firms.

Mizuho, SMBC, DBS Financial institution and MUFG have been employed as funding bankers for the bond providing. REC declined to remark when contacted.

REC doesn’t have a credit standing of A. Traders could discover consolation within the firm’s parentage as Authorities of India is its main shareholder. REC’s credit standing of BBB- mirrors India’s sovereign score.

ET had reported on Nov 14 that REC Restricted had received gentle commitments from main Japanese buyers which it had tapped for the providing throughout preliminary advertising conferences.If profitable, the financing may open a brand new avenue of funding for the corporate, initially an influence sector financier, which has now diversified into financing of airports, roads, ports and electrical autos.The one different Indian firm to lift funds through yen bonds previously 5 years is Exim Financial institution.