IRFC is the fourth company that I’ll be writing about which is issuing a second tranche of their tax free bonds, and their term structure is identical to REC and Â PFC.
The issue will also open on February 25th and close on March 15th 2013, and that’s exactly the same as the other two as well, and I’m not sure why all these companies have decided to come out with their issues at the exact same time.
|Option||Tranche- II Series 1||Tranche- II Series 2|
|Tenor||10 years||15 years|
|Minimum Investment||Rs. 5,000||Rs. 5,000|
|Coupon Rate for Retail Investors||7.38%||7.54%|
The issue is rated AAA which is the same as the other two and that’s probably the reason why they have the same interest rate as well.
Like the earlier issue this time you can invest in this issue in paper or Demat form and the bonds will be listed on the BSE so you don’t have to hold them to maturity but can trade them as well.
The interest will be paid annually, and there is no option to reinvest the interest in the same bond. I couldn’t find the interest payment date in the prospectus so if anyone knows that then please leave a comment.
This is the fourth post about tax free bonds and since they are so similar I don’t know what else to add. I will however note that they are talking about doing away with tax free bonds from next year onwards so if you are in the 30% tax bracket then these are good to own in your portfolio. Also, it’s good to diversify and own bonds from two or more issuers since their terms are quite identical.
If you have any questions then please leave a comment and I’ll answer them.