The floating rate bond issuance may have been withdrawn due to high rates of interest sought by investors, sources said.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