Perpetual bonds do not have a specified date of maturity. The issuers can buy back the bonds after a certain period, and it is generally five years or 10 years. Like other bonds, these bonds are also listed on the stock exchanges and provide exit opportunities to the Investors. Nowadays, Perpetual Bonds are making some noise in the market for all the right reasons. Investors are now pulling out their investments made in bank fixed deposits (FDs) and putting them into perpetual bonds. Also, the rate cuts made by the Reserve Bank of India (RBI) since 2019 and aggravating COVID-19 impact has made FDs lose their shine. Tata Motors Finance Limited has issued recently the three tranches of the Perpetual Bonds starting with 10.25% in September to 9.75% in the last issue and currently up for a deal at a rate of 9.55% and in all the tranches the issuer has raised the amount successfully one because of the Brand Name and second the terms of the issue. The issuer also promises to pay additional 100 bps to the base coupon if the call date is not exercised means the coupon will be revised to 10.55% from 9.55% at the end of the 10 years from the allotment date.
Opportunity to Invest in the Fixed Income Market. Private Placement of Tata Motors Finance Ltd.
Issuer: Tata Motors Finance Limited (Perpetual) Tranche 4
Rating: A by ICRA
Issue Size: 25.00 Cr base issue + (75 Cr. Green Shoe)
Face Value: 10.00 Lacs
Call Option: The Issuer may exercise Call Option on the date falling at the expiry of 10 years from the Deemed Date of Allotment and the last date of every month thereafter (each at a Call Option date)
Step Up: 100 bps after 10 Years (if the call option is not exercised)
Coupon Payment Dates: 19th Jan/Annually
Bidding: Monday, 18th Jan 2021
Allotment Date: Tuesday, 19th Jan 2021
Deal Value Date: Thursday, 21st Jan 2021
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