HDFC doubles 5-year bond issue size to minimum Rs 500 cr

Mumbai: Housing Development Finance Corp (HDFC) has more than doubled its five-year bond issue size to at least Rs 500 crore ($89.46 million) on brisk investor demand, three sources with direct knowledge of the deal said on Monday.

The mortgage lender, however, has kept the pricing unchanged at 9.70% for the issue, which has a greenshoe option of Rs 250 crore, said the sources.

“The bond is seeing commitments from mutual funds and insurers, so we have increased the issue size,” a company source said.

Traders say last week’s weaker-than-expected GDP data for the last quarter of the 2011-12 fiscal year that ended in March has sparked rate cut hopes, resulting in a rally in bond prices and boosting the demand for corporate paper.

The issuer had initially aimed to raise a minimum Rs 200 crore. ICICI Bank is the sole arranger.