Greater Hyderabad Municipal Corporation (GHMC) has raised Rs 1.95 billion through municipal bonds for financing road development projects in city.
These 10-year bonds were placed with investors, including finance companies, banks and pension funds, at a coupon rate of 9.38 per cent. They carry “AA” rating from CARE and India Ratings.
SBI Capital Market (SBI Caps), arranger for transaction, said in a statement GHMC received bids of Rs 2.5 billion, which was 2.5 times the base issue size of Rs 1 billion. This is the second municipal bond issuance for GHMC. It had raised Rs 2 billion earlier this year.
The unsecured bond issue is backed by a structure payment mechanism. Under it, property tax and fees and user charges collected by and due to GHMC will be deposited every month in a separate no-lien escrow account for debt servicing of bonds, SBI Caps said.