BL reported that Indian Railway Finance Corporation has kicked off its fund mobilization program for the 2009-10 fiscal with bond issues of INR 1,811 crore.

The bonds have been raised for tenors of five years for INR 350 crore, ten years for INR 900 crore and 15 years for INR 561 crore. The average cost of raising the INR 1,811 crore is about eight per cent.

Mr R Kashyap MD of IRFC, told Business Line that “We have raised INR 1,811 crore through bond issues at about eight per cent.” But he declined to share more specific details on cost.

The public sector enterprise which raises funds to finance the rolling stock acquisition program of the Indian Railways is budgeted to mobilize about INR 8,030 crore in 2009-10.

Public sector undertakings, which have an implicit sovereign guarantee by virtue of their ownership, are mobilizing funds at approximately 200 basis points over the sovereign rates. The 10-year Government bonds were trading in the 6.11-6.21 per cent levels in the last few days.

(Sourced from Business Line)