FILE PHOTO: PFC accepts bids for 5-year dollar bond issue
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Power Finance Corp has accepted bids worth $300 million for a five-year dollar bond issue, becoming the first non-bank lender to tap the central bank’s subsidised hedging facility for overseas borrowings, three bankers said.The bonds were priced at a spread of 105 basis points over US Treasuries, giving a yield of 5.327%, well inside the initial guidance of 130 basis points, indicating strong investor demand.“The company chose to accept a lower quantum as this was their first tranche, but they could explore this route again when treasury yields ease,” one of the bankers said on Tuesday.Earlier, PFC had told bankers that it intended to raise $500 million, but ultimately settled for a smaller amount, as bankers said the spread would have widened had it pursued the full quantum.The bankers requested anonymity as they are not authorised to speak to media, while PFC did not reply to a Reuters email seeking comment.This comes after HDFC Bank sold $750 million of five-year dollar bonds last week at a spread of about 90 basis points over US Treasuries.Earlier this month, the RBI said external commercial borrowings by banks and state-run companies would qualify for a subsidised hedging facility, helping cut the cost of managing currency risk.The step forms part of a wider RBI push to draw in dollar inflows and bolster the rupee.Lenders Bank of Baroda and Axis Bank have finalised bankers for their planned dollar bond sales, and may set the pricing on them before the end of the week.Published on June 23, 2026
