New Delhi: The Rs 7,400-crore non-convertible debentures of Air India will get the sovereign guarantee of the Government.
The decision to provide the “unconditional sovereign guarantee” was cleared at a meeting here late this afternoon. The NCD will have a tenure of 19 years and the interest payable will not exceed 9.2 per cent —- 70 basis points above the 10 year benchmark Government of India security.
Thus if the current 10-year benchmark yield is 8.15 per cent, the maximum applicable interest payment will be 8.85 per cent. The NCD proceeds will be used to repay lenders.
NCDS are part of the airline’s financial restructuring plan that was cleared by the Government in March.
“Air India hopes to close the NCD within two to three weeks of getting all clearances. The airline plans to appoint merchant bankers soon to market the NCD.
09/10/12 Business Line
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The decision to provide the “unconditional sovereign guarantee” was cleared at a meeting here late this afternoon. The NCD will have a tenure of 19 years and the interest payable will not exceed 9.2 per cent —- 70 basis points above the 10 year benchmark Government of India security.
Thus if the current 10-year benchmark yield is 8.15 per cent, the maximum applicable interest payment will be 8.85 per cent. The NCD proceeds will be used to repay lenders.
NCDS are part of the airline’s financial restructuring plan that was cleared by the Government in March.
“Air India hopes to close the NCD within two to three weeks of getting all clearances. The airline plans to appoint merchant bankers soon to market the NCD.
09/10/12 Business Line
