Reliance issues 'perpetual bonds' worth $800m: FT

January 30, 2013 17:04

Reliance Industries 'has raised $800m via a perpetual bond with no penalty clause, the first Indian company to issue a "for life' perpetual as it seeks to exploit record low interest rates and strong demand for Asian credit,' reports the Financial Times.

So what are perpetual bonds? The newspaper answers the question: 'Perpetual bonds never expire, but typically have a penalty, or a preordained increase in the yield paid by the bond, that gives the borrower an incentive to pay investors back after a certain length of time. Perpetual bonds that maintain a set yield are known as "fixed for life".'

'The bond will yield 5.875 per cent compared with 5.25 per cent for the company's 30-year bonds, and was around four times oversubscribed with almost $3bn in orders,' FT further reports.

Read the full report here.

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