Tax Free Bonds open for subscription in 2013

by Manshu on February 20, 2013

in Fixed Deposits

The last few days saw 4 companies announce the second tranche of their tax free bonds, and with the exception of HUDCO, the other three have identical interest rate and maturity periods.

The interest rates on the second tranche has gone down when compared with the first tranche and that’s because the interest rate on G-Secs have gone down between the time the first tranche was issued and now.

There is only one company that issued bonds earlier and hasn’t come out with a second tranche and that’s IIFCL. They were the only one to have a 20 year term so none of the bonds presently in the market (or to be issued shortly) have a 20 year term.

Here are the details of all the 4 tax free bond issues that are either open now or will open shortly.

Issuers

Open and Close Date

CARE Credit Rating

10 years Retail

15 years Retail

20 years Retail

Interest Payment Date 

HUDCO Tranche 2
Feb 18 2013 – Mar 15 2013

AA+

7.53%

7.69%

NA

 
PFC Tranche 2
Feb 25 2013 – Mar 15 2013

AAA

7.38%

7.54%

NA

 
REC Tranche 2
Feb 25 2013 – Mar 15 2013

AAA

7.38%

7.54%

NA

 
IRFC Tranche 2
Feb 25 2013 – Mar 15 2013

AAA

7.38%

7.54%

NA

 

These are all reasonably safe issues to invest in, and I think even with the lowered interest rate are useful for people in the 30% tax bracket. You can spread your money in two or more issues to diversify since they are so identical in nature. If you have any other questions please leave a comment, and I’ll answer them.

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