Around Rs 5,000 crore raised by NABARD through 3-year bonds

Published on January 09, 2023
Current Context: The National Bank for Agriculture and Rural Development (NABARD) has raised almost Rs 5,000 crore through 3-year notes under its maiden offering of "fundraising through bonds in 2023."
Around Rs 5,000 crore raised by NABARD through 3-year bonds
  • The 3-year bond had a 63 percent coupon. (The yield on government bonds with a three-year maturity was above 7.16%) The NABARD offer featured a Rs 2,000 crore base size and a Rs 3,000 crore green shoe option.
  • NABARD is excluded from filing documents for a bond issue with the Ministry of Corporate Affairs because it is a public financial organization.
  • REC Limited (previously Rural Electrification Corporation Limited):
    • Like NABARD, REC Limited (formerly Rural Electrification Corporation Limited) plans to raise up to Rs 3,000 crore through a 10-year paper (maturing in January 2033). With a green-shoe option of Rs 2,500 crore, the base size is Rs 500 crore.
    • In order to raise up to Rs 3,000 crore from the market, it also intends to issue medium-term papers (duration: 41–42 months).
  • What is a Coupon bond?
    • A coupon bond is a type of bond that features coupons and pays periodic interest payments throughout its life and par value when it matures.
    • The bond's yield at the date of issuance is referred to as the coupon rate. Bonds with higher coupon rates will provide investors with larger returns on their capital.
  • NABARD:
    • Headquarter: Mumbai
    • Established: 1982
    • Chairman: Shri. Shaji K V

Question: 

Q.1 The NABARD has raised almost Rs _______ through 3-year notes under its maiden offering of "fundraising through bonds in 2023."
a. 3000 crore
b. 4000 crore
c. 3500 crore
d. 5000 crore

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