M&M Issues NCDs With 50-Year Maturity
Vinaya Patil / 04 Jul 2013
The instrument will carry a coupon rate of 9.55% per annum, payable annually. The company intends to use the funds raised from this issue for capital expenditure, long-term capital requirements and refinancing of loans taken for capital expenditure.
Mahindra & Mahindra (M&M) has announced that it has successfully placed a NCD series of 50-year maturity for Rs 500 crore. The instrument will carry a coupon rate of 9.55% per annum, payable annually. These 
NCDs are unsecured, rated, listed and redeemable on the 50th year.
Subscription for this instrument opened on July 2, 2013 and closed on the same day. It was carried out as a private placement. The proceeds of this issue will be deployed for capital expenditure, long-term capital requirements and refinancing of loans taken for capital expenditure.
Apart from raising capital, the placement of these NCDs hints towards the reputation and credit worthiness of M&M. It stretches the limits of the 30-year corporate bond market maturity and creates more room for the company’s future capital market offerings.
V S Parthasarathy, Group CIO, EVP – Group M&A, Finance & Accounts and Member of the Group Executive Board comments, “This was hitherto unexplored maturity horizon in Indian markets. It creates a new market for our future capital offerings. It gives financial flexibility for capital allocation of the company”.
The deal was arranged and underwritten by YES Bank. The issue was assigned AA+/stable rating by CRISIL and ICRA.
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