The Hindu Business Line : JNPT set to float long term listed bonds soon

JAWAHARLAL Nehru Port Trust (JNPT) is set to come out with a long-term listed bond issue shortly as part of its efforts to raise funds from the market and pre-pay the principal outstanding World Bank loan of Rs 468 crore.

"The port trust has more or less decided on issuing long-term bonds that are listed. This would help JNPT in getting competitive rates as well as attract banks and other investors who are looking for listed securities of more than a year," a Shipping Ministry official said.

The long-term listed bond issue has AAA rating from Crisil-CARE and is expected to hit the market sometime in the last week of December or in the first week of January 2004, he revealed.

The port trust is in the midst of getting the bond listed after complying with all the requirements of the market regulator. JNPT is not a corporate entity, but is governed by the Major Port Trusts Act, 1963.

The size of the bond issue will depend on the amount to be paid by the port trust to the Shipping Minister, Mr Shatrughan Sinha, on December 18 as first tranche of the pre-payment of the World Bank loan.

JNPT has authorisation from the Government to raise Rs 450 crore from the market involving Rs 225 crore each of short-term unlisted and long-term listed bond issues. This will be used to pre-pay the outstanding principal World Bank loan of Rs 468 crore.

The Rs 225-crore short-term unlisted bond issue was over-subscribed when it was launched on Wednesday. The port trust has, however, decided to keep the issue open till Friday on the hope that more subscriptions would drive down the interest rates further.

The bond issue is based on the book-build method and the final spread will be determined after the issue closes on Friday.

The existing World Bank loan carries an annual interest rate of 11.5 per cent. The port trust is now borrowing funds at a rate of 5 - 6 per cent taking advantage of the prevailing lower interest regime and to save on its huge debt servicing cost, the official said.

JNPT, the youngest and the most modern among all the 12 major ports, was built with loans from the World Bank and inter-port loans from Mumbai and Kandla ports as well as budgetary support from the Government.

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JNPT set to float long term listed bonds soon