NRB approves foreign currency bond
KATHMANDU:
The hydropower companies can now issue debentures in foreign currency with the central bank’s release of the criterion in line with the monetary policy.
Issuing a directive, Nepal Rastra Bank (NRB)’s Foreign Exchange Department has allowed licensed hydro power companies to issue the foreign-currency debentures in Nepal provided the hydro power companies fulfill the criterion.
The hydro power projects that generate income in foreign currency can raise needed funds for developing a project by issuing foreign-currency bonds through the subsidiary merchant banking arm of commercial banks and development banks.
“Only the projects that have already undergone Power Purchase Agreement (PPA) with Nepal Electricity Authority (NEA) will be allowed to issue foreign-currency bonds to ensure the projects can pay back the principle amount and interest in foreign currency,” informed spokesperson of the NRB Bhaskar Mani Gyanwali.
The hydro power companies can only issue debenture worth 60 per cent cost of the project.
Himal Power Company (HPL) has already undertaken preliminary steps to issue $60 million debentures in the domestic financial market, based on the announcement of monetary policy that had provided legal framework for the issue by announcing the preparation of framework to be allowed to raise funds through innovative financial products.
Ace Capital Ltd — the merchant banking subsidiary of Ace Development Bank — has already been appointed as the issue manager and the bank will act as the issue advisor for Himal Power Company. The bonds can be sold through private placement or through public issue to class ‘A’ and ‘B’ financial institutions that are allowed to handle foreign currency deposits, to Non Resident Nepalis (NRN) or to the individuals that have valid source of foreign currency income.
“Hydropower companies have to go through a lot of hassles to procure loans from foreign countries but by allowing the issuance of foreign-currency bonds they get access to funds in the domestic grounds with out much trouble,” pointed out Gyanwali. Himal Power Company need only to get approval from capital market regulator now. “Our existing regulations allow the companies to issue bonds in foreign currency,” said Securities Board of Nepal director Niraj Giri.
The company needs to get its prospectus approved by the regulator before getting a go ahead by Sebon. “We have already started the formal process following NRB circular and be filing the Offer Documents for the dollar denominated bond to Sebon for the required approval as soon as possible,” said managing director of Ace Capital Pramod Pandeya.
According to the plans, the bond 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.
Source: THT
The hydropower companies can now issue debentures in foreign currency with the central bank’s release of the criterion in line with the monetary policy.
Issuing a directive, Nepal Rastra Bank (NRB)’s Foreign Exchange Department has allowed licensed hydro power companies to issue the foreign-currency debentures in Nepal provided the hydro power companies fulfill the criterion.
The hydro power projects that generate income in foreign currency can raise needed funds for developing a project by issuing foreign-currency bonds through the subsidiary merchant banking arm of commercial banks and development banks.
“Only the projects that have already undergone Power Purchase Agreement (PPA) with Nepal Electricity Authority (NEA) will be allowed to issue foreign-currency bonds to ensure the projects can pay back the principle amount and interest in foreign currency,” informed spokesperson of the NRB Bhaskar Mani Gyanwali.
The hydro power companies can only issue debenture worth 60 per cent cost of the project.
Himal Power Company (HPL) has already undertaken preliminary steps to issue $60 million debentures in the domestic financial market, based on the announcement of monetary policy that had provided legal framework for the issue by announcing the preparation of framework to be allowed to raise funds through innovative financial products.
Ace Capital Ltd — the merchant banking subsidiary of Ace Development Bank — has already been appointed as the issue manager and the bank will act as the issue advisor for Himal Power Company. The bonds can be sold through private placement or through public issue to class ‘A’ and ‘B’ financial institutions that are allowed to handle foreign currency deposits, to Non Resident Nepalis (NRN) or to the individuals that have valid source of foreign currency income.
“Hydropower companies have to go through a lot of hassles to procure loans from foreign countries but by allowing the issuance of foreign-currency bonds they get access to funds in the domestic grounds with out much trouble,” pointed out Gyanwali. Himal Power Company need only to get approval from capital market regulator now. “Our existing regulations allow the companies to issue bonds in foreign currency,” said Securities Board of Nepal director Niraj Giri.
The company needs to get its prospectus approved by the regulator before getting a go ahead by Sebon. “We have already started the formal process following NRB circular and be filing the Offer Documents for the dollar denominated bond to Sebon for the required approval as soon as possible,” said managing director of Ace Capital Pramod Pandeya.
According to the plans, the bond 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.
Source: THT
