Mumbai: Public sector power producer National Thermal Power Corporation Ltd (NTPC) is raising Rs2,000 crore ($507 million) through a loan and a bond issuance to fund its capital expenditure.
NTPC has signed a loan agreement for Rs1,000 crore along with a bond subscription agreement for another Rs1,000 crore with state-run insurer, Life Insurance Corporation of India, according to a filing with the Bombay Stock Exchange (BSE).
NTPC said the proceeds of the loan and bond subscription with LIC would be used to finance capital expenditure of its power generation projects, coal mining business, renovation and modernisation activity as also the LNG business.
The door-to-door maturity of both the agreements is 11 years, the repayments to take place in 14 half-yearly instalments commencing after four years cash advance in one hour. The interest rate/coupon is linked to 10 year G-sec rate plus margin. The proceeds under these agreements are to be utilised before end-March 2008.
The coupon rate was at a margin above the yield on the 10-year government bond, NTPC said.
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Treasury Secretary Paulson’s plan to rescue subprime mortgages will be greeted with legal challenges by investors, lawyers predict.
The plan, announced last week, would stop rate increases on some subprime and adjustable rate mortgages. The holders of mortgage securities are anticipating revenue from those increases and may claim that the rate freezes are a breach of contract.
Because the plan is voluntary, legal experts say that the targets of investor lawsuits aren’t likely to be the federal government, which brokered the agreement no fax payday advance. More likely to be named as defendants are mortgage servicers — the companies which collect mortgage payments and decide when to foreclose. Many major banks have a mortgage servicing division.
“The only thing the government did was bring the parties together — the ones on the line would likely be the servicers,” a former general counsel to the Treasury Department, now a fellow at the American Enterprise Institute, Peter Wallison, said.
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A coalition of lenders, loan servicers and investors have reportedly agreed to a plan that would freeze interest rates on some subprime mortgage loans for five years.
Borrowers with loans made between Jan. 1, 2005, through July 30 of this year who face interest rate resets between Jan. 1, 2008, and July 31, 2010, would be eligible for interest rate freeze, the Associated Press reported, citing unnamed sources including Congressional aides http://payday-nofax.com.
An official announcement of the plan’s details is scheduled for Thursday, AP reported.
Treasury Secretary Henry Paulson said Monday the plan would help homeowners who are current on their payments but cannot afford a higher adjusted rate (see Inman News story).
Debate over the plan has centered around the length of any interest rate freeze, AP reported, with federal regulators pushing for a seven-year freeze, and the industry holding out for a one- to two-year reprieve.
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