The Hindu : IDBI cuts rate for Flexibonds-18 series

Online edition of India's National Newspaper
Tuesday, Mar 04, 2003

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IDBI cuts rate for Flexibonds-18 series

MUMBAI MARCH 3. Industrial Development Bank of India has scaled down the interest rate for its flexibonds-18 series of Rs. 350 crores with an option to retain oversubscription of up to the same amount.

The financial institution has also introduced a new instrument, fixed option floating option bond, in this issue, which would remain open for subscription from March 7 to 31, the FI said in a release.

In the infrastructure (tax saving) bond, the rate has been reduced to 7 per cent (7.25 per cent in Flexibonds 17 series) payable for three years or 7.25 per cent (7.5 per cent) payable for five years under the annual interest option.

The interest for options A and C offering annual interest payment to investors under the regular income bond has been brought down to 7.4 per cent (7.75 per cent) and 7.6 per cent (8 per cent) for 7even years and 10 years respectively.

In the case of options B and D, the rate has been pegged at 7.2 per cent (7.4 per cent) and 7.35 per cent (7.7 per cent) for 7 and 10 years respectively, IDBI said.

Referring to fixed option floating option bond, the FI said it included features of fixed interest and floating interest instruments with suitable exit option to investors. Investors would receive 7.25 per cent (fixed) for the first three years (ending April 24, 2006). Thereafter, IDBI would have an option to step up the fixed rate to 7.5 per cent per annum or switch over to floating rate basis in the fourth and fifth year. — PTI

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