Tata Power gets bids for 1500 crore perpetual bonds

Tata Power gets bids for 1500 crore perpetual bonds

Mumbai: Tata Power has received underwriting bids on Tuesday for its 1500 perpetual bonds, but is expected to launch the deal by the second week of August, four sources who bid for the issue said.

The firm is expected to invite bankers for a second round of negotiation before it finalises the pricing, the sources said.

The deal is expected to be priced at sub-11% semi-annual coupon levels, compared to the prevailing secondary market range of 10.75-10.85% annualised, they said.

Earlier this month, Standard & Poor downgraded the outlook for the firm to ‘negative´ from ‘stable´ citing the company’s limited ability to arrange funds for a 4000 megawatt project in the western state of Gujarat, after it breached a debt pact.

The firm is planning to raise funds through perpetual bonds as they are considered quasi-equity, giving much needed support to the leverage ratio, three bankers involved in the deal said.

The perpetual bond has a call option at the end of the tenth year. The firm has tapped funds through such bonds twice in 2011.