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MUMBAI, Feb. 13

THE Karnataka-based Krishna Bhagya Jala Nigam Ltd (KBJN) has planned an issue of redeemable non-convertible bonds worth Rs 350 crore for cash at par by February 28. The company plans to issue tax-saving infrastructure and regular return bonds.

"The bonds have been guaranteed by the Karnataka Government for timely payment of principal and interest. An escrow account has been opened for repayment,'' Mr B. Parthasarathy, Managing Director, KBJN, told presspersons here on Wednesday.

Both the infrastructure and regular return bonds will have a face value Rs 5,000. For infrastructure bonds, investors will have the option of investing for three years with an interest rate of 10.50 per cent.

Five-year investments will have a put-and-call option after three years with a 10.50 per cent interest rate. The rates will increase to 10.75 per cent for the fourth and fifth year.

The money raised will be used to fund the Upper Krishna project.The bonds have been assigned the "A+(SO)'' rating by Crisil and "LA+ (SO)'' by ICRA.

The ratings indicate timely payment of financial obligations of the instrument and adequate safety respectively. The bonds will be listed on the Bombay, Bangalore and National Stock Exchanges.

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