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PFC: PFC scraps three-year floating rate bond sale

Mumbai: State-owned Power Finance Corp (PFC) withdrew a planned sale of three-year floating rate bonds, through which it had intended to raise up to ₹2,400 crore of funds, sources said.

The floating rate bond issuance may have been withdrawn due to high rates of interest sought by investors, sources said.

PFC had planned to issue 3-year floating rate bonds worth ₹400 crore with an additional subscription option of ₹2,000 crore.

The floating rate bonds were to be priced at a spread over yields on the government’s three-month treasury bills, with the coupon reset on a quarterly basis, people aware of the development said.

At the latest primary auction on Wednesday, the cut-off for the government’s 91-day treasury bills was set at 6.90%. “The spread that was received for PFC’s floating rate bond was around 125 bps over T-bills for a quantum of ₹1,200 crore. That works out to be over 8%; and could have been a reason for them withdrawing that issue,” a treasury executive said.

The power financier, however, went ahead with another planned sale of 5-year non-convertible debentures, raising funds worth ₹1,550 crore at a coupon of 7.44%

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