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Thursday, February 05, 2009

Govt issues oil bonds to three PSU OMCs

IOC gets bonds worth Rs 11943.93 crore

The Centre on Wednesday issued bonds worth Rs 21942 crore to the three state-owned oil marketing companies (OMCs) to compensate them for their losses (under-recoveries) due to selling fuels below the market price. The government issued Rs 11943.93 crore bonds to Indian Oil Corporation (IOC), Rs 5316.71 crore to Bharat Petroleum Corporation (BPCL) and Rs 4681.36 crore to Hindustan Petroleum Corporation (HPCL).

The 17-year bonds carry 6.90% coupon rates, the finance ministry said in a statement. The special bonds will be transferable and eligible for market ready forward transactions (Repo). The investment in the special bonds by the banks and insurance companies will not be reckoned as an eligible investment in government securities for their statutory requirements, the finance ministry clarified. However, such investment by the insurance companies

will be eligible to be reckoned, as investment under other approved securities' category as defined under the Insurance Regulatory and Development Authority (Investment) Regulations, 2000,act it added.

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