Himal Power to issue US dollar debenture
KATHMANDU:
The domestic bond market will be witnessing the issue of US dollar denominated debentures. Himal Power is issuing $60 million debentures in the market.
Ace Capital, the merchant banking subsidiary of Ace Development Bank, will manage the issue and the development bank will act as the issue advisor for the Himal Power.
“It is the first of its kind of innovative financial instrument in the Nepali financial market,” CEO of Ace Development Bank Siddhant Raj Pandey said, adding that it is a pilot project that will inspire others too. “The Monetary Policy has also provided legal framework for the issue,” he added.
The debenture will yield six per cent as coupon rate per annum and will mature in five years period with a roll over option that will be declared in 2013. It will be offered for private placement to the commercial banks and development banks, according to the issue manager. The debenture — planned to be traded through Over-The-Counter (OTC) market — will be fully secured by cash flow of Himal Power that is in US dollars earned by selling electricity to Nepal Electricity Authority (NEA).
The banks and financial institutions hold about $78 million as foreign reserve that are invested in foreign treasuries that only yield about two per cent. “The instrument will be providing six per cent thus financial institutions are excited due to its higher return,” he added.
“We are still in initial stage as regulator’s approval is yet to obtain,” MD of Ace Capital Pramod Pandaya said, adding that the issue will be put through once Securities Board of Nepal and Nepal Rastra Bank approve. “Both the regulators are preparing required directives to give green signal.”
Source: THT
The domestic bond market will be witnessing the issue of US dollar denominated debentures. Himal Power is issuing $60 million debentures in the market.
Ace Capital, the merchant banking subsidiary of Ace Development Bank, will manage the issue and the development bank will act as the issue advisor for the Himal Power.
“It is the first of its kind of innovative financial instrument in the Nepali financial market,” CEO of Ace Development Bank Siddhant Raj Pandey said, adding that it is a pilot project that will inspire others too. “The Monetary Policy has also provided legal framework for the issue,” he added.
The debenture will yield six per cent as coupon rate per annum and will mature in five years period with a roll over option that will be declared in 2013. It will be offered for private placement to the commercial banks and development banks, according to the issue manager. The debenture — planned to be traded through Over-The-Counter (OTC) market — will be fully secured by cash flow of Himal Power that is in US dollars earned by selling electricity to Nepal Electricity Authority (NEA).
The banks and financial institutions hold about $78 million as foreign reserve that are invested in foreign treasuries that only yield about two per cent. “The instrument will be providing six per cent thus financial institutions are excited due to its higher return,” he added.
“We are still in initial stage as regulator’s approval is yet to obtain,” MD of Ace Capital Pramod Pandaya said, adding that the issue will be put through once Securities Board of Nepal and Nepal Rastra Bank approve. “Both the regulators are preparing required directives to give green signal.”
Source: THT
