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FCI bond issue opens today

Mamuni Das

New Delhi, Dec. 6

THE Food Corporation of India (FCI) plans to raise up to Rs 5,000 crore through issue of bonds to restructure its debt. The basic bond issue of Rs 1,000 crore with a greenshoe option will open on Wednesday.

If FCI raises the entire Rs 5,000 crore, it will save about Rs 90 crore per annum.

"We have not specified the greenshoe option, but we have Government clearance and AAA guarantee rating by Crisil (Credit Rating Information Services of India Ltd) and Icra (Investment Information and Credit Rating Agency) for Rs 5,000 crore," said Mr R.P. Vaishnaw, Chief General Manager, FCI.

The bonds will be privately placed with institutional investors and are of two terms — five years and ten years. The coupon rate of the five-year bonds is 7.28 per cent where that of the ten-year bonds is 7.58 per cent, he said.

There are eight arrangers for the issue that include AK Capital Services, SBI Capital, UTI Bank, ICICI Securities, Darashaw and Company, Alliance Securities and Centrum Capital.

At present, FCI has a loan in the range of Rs 28,000-Rs 30,000 crore from an SBI-led consortium of 61 banks. The cost of this loan is nine per cent per annum.

Earlier, this year, FCI had raised Rs 5,000 crore through bonds issuance. The move resulted in savings of over Rs 90 crore per annum to the corporation.

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