New Delhi, Mar 04: The country’s largest power utility National Thermal Power Corporation(NTPC) announced on Thursday the successful completion of $200 million external commercial borrowing(ECB), more than half of which came from Europe and US. "We raised USD 200 million through a 7-year Euro Bond issue at a very competitive rate of 5.5 per cent," said NTPC chairman and managing director C P Jain here. The bond issue was part of NTPC's requirement to borrow Rs 50,000 crore in the next 8 years for its investment plans. "NTPC priced a Reg S (Regulation S) USD 200 million inaugural bond issue at 99.370 per cent to yield 5.5 per cent, equal to a spread of 205 basis point over the 7-year US Treasury," he said. The final allocation saw 45 per cent of the issue placed with investors in Asia, 47 per cent to Europe and 8 per cent to US offshore accounts. By investor type, asset managers took 39 per cent, banks 32 per cent, pension and insurance 17 per cent and retail and others 12 per cent. "We are pleased with the results of our debt bond offering. NTPC has been able to capitalise on current market conditions to look in attractive 7-year funding. We have now set a new benchmark that will facilitate future fund raising exercises by the company," Jain said. NTPC director (finance) P Narasimharamulu said "we have cultivated a new group of international investors and diversified the company's source of funding. These objectives are keys to the company's growth strategy going forward." NTPC had appointed Merril Lynch and ABN Amro Bank as joint lead managers for the issue, Jain said. The initiative to hit the global market came close on the heels of a mega deal signed by NTPC with Life Insurance Corporation for borrowing Rs 7000 crore at an interest rate of 6.5 per cent. Prior to these two deals, NTPC tied up over Rs 6,000 crore from various banks and financial institutions during the financial year and the Euro Bond is the first global mop up by the Corporation in 2003-04. NTPC planned to tap both domestic as well as overseas markets in the near future to mop up Rs 50,000 crore to meet the target of adding 20,000 MW capacity by 2012. Jain said the bonds would be repaid in 7 years. The roadshows for the bond issue were held in Hong Kong and London. In the tenth plan, NTPC planned to add 9160 MW of which 1500 MW had already been commissioned and work was in progress on 6,200 MW leaving another about 1400 MW for which plans were being worked out. NTPC has been given a target of adding 20,000 MW by 2012 to add one lakh MW capacity as announced by the Centre with a view to provide electricity for all. Bureau Report