PFC To Raise $500 Mn Overseas Debt In A Month

New Delhi: State-run Power Finance Corporation today said it would raise $500 million (2,750 crore) of overseas debt within a month in order to meet its borrowing target of 40,000 crore during the current financial year.

"We would raise $500 million through medium-term notes (MTN) in January," PFC Chairman and Managing Director Satnam Singh told reporters here.

He added that the company can raise up to $1 billion but at present it was only raising half the amount.

The road shows for this MTN programme were done in November and the company, which is a Financial Institution (FI) dedicated to power sector financing, is hopeful of raising this debt as soon as possible.

A medium-term note (MTN) is a debt instrument that usually matures or is paid back in 510 years, but the term may be less than one year or as long as 50 years.

The company may also come with a syndicated bond issue of $250 million.

"Another $250 million we are planning to raise, lets see," Singh said.

PFC will be lending 19,600 crore to the state electricity boards. The company has already disbursed 7,400 crore to the states of Punjab, Haryana, Uttar Pradesh, Tamil Nadu and Andhra Pradesh, so far.

These loans carry a moratorium of three years and a repayment period of seven years.

The public sector company''s fund raising target for the current financial year is 40,000 crore of which 21,000 crore has already been raised 17,555 crore has been disbursed till September, this year.

"I am very confident of achieving the target of 40,000 crore borrowing target during the current fiscal of which 21,000 crore has already been raised and this tax-free bond issue is likely to fetch close to 5,000 crore," Singh added.

Meanwhile, PFC said it would launch a programme to raise 4,590 crore through tax free bonds. The issue would open on December 14 and close on December 21.

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