Hyderabad Municipal Body Raises Rs 100 Crores Through Bond Issue
At a time when many of its peers are grappling with monetary issues, the Greater Hyderabad Municipal Corporation (GHMC) has raised Rs 100 crores by issuing municipal bonds as part of its Rs 300-crore fundraising plan. The municipal body looks to raise another Rs 200 crores through the bonds in the next two months. With this, the GHMC has also become the largest municipal bond route utiliser in the country. Mayor B Rammohan said they would place another Rs 200 crores for bidding, in the next two months. Using these funds, the body will build skyways, conflict-free corridors and improve travel time within cities by making traffic jams a history.
The AA-rated GHMC bond offered 9.38 per cent interest on 10-year maturity. In February 2018, the coupon rate of the GHMC bonds were 8.90 per cent, maturing in 10 years while this time, a coupon rate of 10.23 per cent has been offered. Net interest after GoI (government of India) incentive of Rs 13 crores, is at nearly 9 per cent.
Municipal bonds are debt instruments, under which the investor is repaid the fixed amount of principal with interest, over a period decided by the municipal body.