A termsheet showed that the Power Finance Corp of India (PFC) would be raising INR 1.5 billion or USD 22.69 million through private placement of tax-free bonds. The document also revealed that PFC would open the placement to sovereign wealth funds. It would also allow pension and gratuity fund investors to participate in the private placement.

The bonds issued would have terms of ten, fifteen and twenty years. The ten-year bonds would have a yield of 8.11%, while the fifteen-year bonds would yield 8.48%. The twenty-year bonds would yield 8.44%.

The private placement has an over-allotment option of INR 3.76 billion. Also called a greenshoe option, an over-allotment option would allow PFC to sell more shares to investors if the demand calls for it. The bonds have obtained an AAA rating from rating agencies. The private placement is scheduled for Friday.

Power Finance was established in 1986 to give financial backing for the power sector in India.