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NTPC first off the blocks once again - raises US$ 500 million

21st Nov, 2014

from international markets

NTPC Limited (NTPC), the largest power generating company in India, priced a US$ 500million Medium Term Note offering in the international markets on 19th November 2014. NTPC is the first Indian company to tap the foreign currency bond market after the Government of India, Ministry of Corporate Affairs clarified recently that provisions of the new Companies Act,2013 regarding prospectus and allotment of securities do not apply to issue of foreign currency bonds by Indian corporates.

Taking advantage of a strong primary credit market with renewed interest in Indian credits, NTPC launched a benchmark size, senior, unsecured, fixed rate 10 year bond transaction with an initial price guidance of US Treasuries (UST) plus 230bps area on 19th November (Asia open). The offering was met with very strong demand and the transaction was oversubscribed within an hour of announcement. At Asia close, the guidance was subsequently revised to T+205-215 bps. The final order book was over US$ 2.3 billion, an oversubscription in excess of 4.6 times, with orders from 160 accounts. On the strength of a large order book, the Company could price the bonds at the tighter end of the range at UST+205bps with the coupon fixed at 4.375% p.a which is the lowest coupon ever achieved by the Company for its international bonds.

Speaking on the deal, Mr.Arup Roy Choudhury, CMD, NTPC stated “We are happy with the overwhelming investor response. It is an affirmation of our leadership position in the Indian power sector by the international investors and renewed interest in India.”

Mr.Kulamani Biswal, Director(Finance), NTPC said “We are pleased to see the robust demand for our transaction and the strong perception of our credit quality by the international investor community. We are glad to receive a warm welcome from investors on our return to the USD bond markets after a gap and at very fine levels inside of comparable secondary levels”.​

In terms of geographical distribution, Asia took the bulk of the transaction at 68%, with supplemental demand from Europe and offshore US accounts at 18% and 14% respectively. The Notes were distributed to high quality fixed income accounts: 53% to fund managers, 20% to banks, 15% to insurance, 8% to official institutions and 4% to private banks and others.​

With a robust portfolio of over 23,000MW capacity under execution, the Company intends to use the proceeds of the issue to finance its ongoing and new power projects.

Barclays, Citigroup, Deutsche Bank, HSBC and SBI Capital Markets acted as joint book-runners and lead managers.


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