NTPC to raise up to $1 bn

India's largest power generation company National Thermal Power Corporation on Tuesday embarked upon a major overseas fund raising exercise and decided to establish medium term note programme of $1 billion.

"In order to facilitate raising debt funds frequently from international market at opportune time, NTPC Ltd has decided to establish MTN programme of $1 billion," NTPC officials told PTI.

The company has mandated Barclay's Capital, a division of Barclays Bank PLC and Deutsche Bank AG to establish the programme, they added.

Prior to NTPC, ICICI Bank, SBI, Bank of India and UTI Bank had set up MTN programme in the last couple of years.

The power major is likely to raise the first tranche of around $200-250 million before the end of current financial year. The notes would have a tenure of 10 years.

NTPC was one of the few companies to get a BB+ rating, equivalent to the sovereign rating, which should allow the corporate to get very fine rates on their borrowings.

NTPC's prgramme to set up an MTN of a whopping $1 billion is in line with its huge investment programme to become 40,000 MW corporation by 2012.

The company has power projects totalling over 8500 MW under construction, which are expected to be completed in the next 2-3 years.

These projects, which are under various stages of construction and require continuous fund flows, are likely to be financed with the MTN borrowings.