FILE PHOTO: PFC accepts bids for 5-year dollar bond issue | Photo Credit: AMIT DAVE

Power Finance Corp has accepted bids worth $300 ​million for a five-year dollar bond issue, becoming the ‌first non-bank lender to tap the central ​bank’s subsidised hedging facility for overseas ⁠borrowings, three bankers said.

The bonds were priced at a spread of 105 basis points over US Treasuries, ‌giving a yield of 5.327%, well inside the initial guidance of 130 ‌basis points, indicating strong investor demand.

“The company ‌chose ⁠to accept a lower quantum as ⁠this was their first tranche, but they could explore this route again when treasury yields ease,” one of the ​bankers said on ‌Tuesday.

Earlier, PFC had told bankers that it intended to raise $500 million, but ultimately settled for a smaller amount, as bankers said the ‌spread would have widened had it ​pursued the full quantum.

The bankers requested anonymity as they are not authorised to speak ⁠to media, while PFC did not reply to a Reuters email seeking comment.

This comes after ‌HDFC Bank sold $750 million of five-year dollar bonds last week at a spread of about 90 basis points over US Treasuries.

Earlier this month, the RBI said external commercial borrowings by banks and ‌state-run companies would qualify for a subsidised hedging facility, ​helping cut the cost of managing currency risk.

The step forms part of a ⁠wider RBI push to draw in dollar inflows and ⁠bolster the rupee.

Lenders Bank of Baroda and Axis Bank have finalised ‌bankers for their planned dollar bond sales, and may set the pricing on them before ​the end of the week.

Published on June 23, 2026