December: A busy month for attractive debt offerings

Updated: Tuesday, December 3, 2013, 12:22 [IST]

December has begun with several debt offerings, including, NCDs and tax free bonds, so much so that an investor has plenty of options to choose from. With several more debt offerings, it's likely to be a really busy month of debt instrument issuance by corporates. Take a look at a few currently on:

Shriram City Union

The Shriram City Union NCDs are currently open for subscription which offers interest rates of 11, 11.25 and 11.5 per cent for time periods of 36, 48 and 60 months (i.e., three, four and five years) respectively. The NCDs offer both interest payout and the cumulative options. The NCDS close on December 24.

HUDCO Tax Free Bonds

For the very first time a tax free bond is offering an interest rate that is above 9 per cent. The Housing and Urban Development Corporation Ltd (HUDCO) has come out with its Tranche II Tax free Bond offering, whose interest rate for retail investors is at a new record as yields on G-SEC have spiked and interest rates are linked to the G-SEC yields.

For retail investors, the annualised coupon or interest rate offered by the HUDCO Tax Free Bonds is 8.76 per cent, 8.83 per cent and 9.01 per cent for tenure of 10, 15 and 20 years, respectively.

Those in the highest tax bracket get a superb pre-tax yield of of 12.68 per cent, 12.77 per cent and 13.03 percent for 10, 15 and 20 years.

The Bonds are currently open for subscription and close on Jan 10.

NTPC Tax Free Bonds

The NTPC Tax Free Bonds are open for subscription from today. Retail investors are entitled to a coupon rate of 8.66 per cent, 8.73 per cent and 9.91 per cent for 10, 15 and 20 years maturity term. While non-retail investor category, including HNIs, QIBs etc. will be entitled to a 0.25 per cent lower coupon rate in comparison to retail investors.

The Bonds close on December 16.

Muthoot Finance

Muthoot Finance NCDs are also open for subscription. The company is offering an attractive coupon rate on its NCDs although there is a certain element of risk involved.

Apart from this there is also likely to be a tax free bond offering from Indian Railways Finance Corporation in the month of December, making it a really busy month of debt offerings.

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