Power Finance Corporation (PFC) plans to raise ₹5,000 crore through a bond issue, the company has informed the stock exchanges.

The bonds have a base size of ₹500 crore, with a greenshoe option of ₹4,500 crore.

The aggregate amount of ₹5,000 crore is within the shelf limit of ₹10,000 crore. The issue will open for subscription on January 16 and will close on January 30, with an option of early closure or extension, a company
filing said.

The company is offering a coupon rate of between 6.85-7.30 per cent. The bonds have been rated ‘AAA’ with a ‘stable’ outlook by CARE, Crisil and Icra, and are proposed to be listed on the NSE.

It will utilise 75 per cent of the proceeds from bonds for onward lending, financing/ refinancing the existing indebtedness and the remaining 25 per cent for general corporate purposes.

This public issue of bonds comes at a time when the company has seen a withdrawal of three bond issues of private placement in the primary corporate bond market amid higher coupon demanded by the investors.

On December 23, PFC have withdrawn its bond issuances after the investors demanded higher yields on their bonds following a surge in yields on government securities.

Prior to this issue, PFC withdrew two bond issuances on December 9 and November 26.