Issue name: RURAL ELECTRIFICATION CORPORATION LIMITIED (REC Infrastructure Bonds)

Issue Opens :  5th March 2012
Issue Closes:  10th March 2012

Instrument Type: Tax Free Secured Redeemable Non-Convertible Bonds in the nature of Debentures
Indicative Coupon/Interest Rate: 8.00% tax free.

Download REC Bond Application Form >> HERE

SUBMISSION CENTERs: Submit your Application at any Bank – ICICI, SBI, HDFC, AXIS, etc.

Got questions, email us: info@nriinvestindia.com

Mode of Allotment: Only in Dematerialised Form (Through DEMAT account only).
Trading Compulsory in dematerialized form over the BSE (Bombay stock exchange).

Issue Size : Rs. 1,500 Crores with an option to retain oversubscription upto a total amount of Rs.3000 Crores.
Credit Rating: “CRISIL AAA/Stable” by CRISIL, “CARE  AAA” by CARE,  “ICRA AAA” by ICRA & “Fitch AAA (Ind)by FITCH.

Tenor:  10 Years and 15 Years from the deemed date of allotment.
Depositories NSDL and CDSL
Proposed to be listed on  BSE

Loan against Bonds: The Bonds can be pledged or hypothecated for obtaining loans.

People/Entities below cannot invest in REC Bonds:
a) Minors without a guardian name;
b) Foreign nationals;
c) Persons resident outside India including NRIs;
d) Overseas Corporate Bodies;
e) FII

Terms of Payment: The entire Face Value per Bond is payable on application. In the event of Allotment of a lesser number of Bonds than applied for, the Company shall refund the amount paid on application to the Applicant, in accordance with the terms of the Prospectus.

TERMS OF THE ISSUE:
The Bonds being offered as part of the Issue are subject to the provisions of the SEBI Debt Regulations, the Companies Act, CBDT Notification, the terms of this Draft Prospectus, the Prospectus, the Application Form, the terms and conditions of the Trustee Agreement and the Debenture Trust Deed, other applicable statutory and/or regulatory requirements including those issued from time to time by SEBI, the GoI, BSE, RBI, RoC and/or other statutory/regulatory authorities relating to the offer, issue and listing of securities and any other documents that may be executed in connection with the Bonds.

1) Authority for the Issue:
The GoI, by virtue of power conferred upon it under item (h) of sub clause (iv) of clause (15) of Section 10 of the Income Tax Act, 1961, has issued CBDT Notification authorising REC to issue the said Bonds upto a total amount of ` 30,000 million during the financial year 2011-12. At the meeting of the Board, held on January 25, 2012 and February 16, 2012, the Board approved the issue of the Bonds for an aggregate amount not exceeding ` 15,000 million with an option to retain oversubscription upto an aggregate amount of ` 30,000 million in the financial year 2011-12.

2) Issue and Status of Bonds:
2.1. Bonds are being issued as Tax free Secured Redeemable Non Convertible Bonds of face value of Rs. 1,000 each in the nature of Debentures having tax benefits under Section 10(15) (iv) (h) of the Income Tax Act, 1961 upto an aggregate amount of ` 30,000 million during the financial year 2011-12.

2.2. The Bonds shall be secured pursuant to a Debenture Trust Deed and underlying security documents. The Bondholders are entitled to the benefit of the Debenture Trust Deed and are bound by and are deemed to have notice of all the provisions of the Debenture Trust Deed.  REC is issuing the Bonds in accordance with the CBDT Notification.

2.3. The Bonds shall be secured by way of first  pari passu charge on the identified immovable property(ies) of the Company and first pari passu charge on the book debts of the Company,  other than those that are exclusively charged/earmarked to ITSL and/or any other lender(s) of the Company, as may be agreed between the Company and the Debenture Trustee, pursuant to the terms of the Debenture Trust Deed with a minimum security cover of one time of the face value of Bonds outstanding at all times.

2.4 The claims of the Bondholders shall be superior to the claims of any unsecured creditors, and shall rank pari passu with other secured creditors having a first  pari passu charge on the identified immovable property(ies) of the Company and/or first pari passu charge on the book debts of the Company that are charged as security under this Issue.

3.  Form, Face Value, Title and Listing etc:
3.1.1. Form of Allotment: The Allotment of the Bonds shall be only in a dematerialized form. REC has made depository arrangements with CDSL and NSDL for issuance of the Bonds in dematerialized form, pursuant to the tripartite agreement dated October 16, 2007  among REC, CDSL and the Registrar to the Issue and the tripartite agreement dated November 15, 2007 among REC, NSDL and the Registrar to the Issue (collectively,“Tripartite Agreements”).

REC shall take necessary steps to credit the Depository Participant account of the Applicants with the number of Bonds allotted.The Bondholders shall deal with the Bonds in accordance with the provisions of the Depositories Act, 1996 (“Depositories Act”) and/or rules as notified by the Depositories from time to time.

3.1.2. The Bondholders may rematerialize the Bonds issued in dematerialized form, at any time after Allotment, in accordance with the provisions of the Depositories Act and/or rules as notified by 244 the Depositories from time to time.

3.1.3. In case of Bonds held in physical form, on rematerialization of Bonds Allotted in dematerialized form,  REC will issue one certificate for each Series of the Bonds to the Bondholder for the aggregate amount of the Bonds that are held by such Bondholder (each such certificate,a “Consolidated Bond Certificate”). In respect of the Consolidated Bond Certificate(s), REC will, on receipt of a request from the Bondholder within 30 days of such request, split such Consolidated Bond Certificate(s) into smaller denominations in accordance with the applicable regulations/rules/act, subject to a minimum denomination of one Bond. No fees will be charged for splitting any Consolidated Bond Certificate(s) and any stamp duty, if payable,will be paid by the Bondholder.The request to split a Consolidated Bond Certificate shall be accompanied by the original Consolidated Bond Certificate(s) which will, on issuance of the split Consolidated Bond Certificate(s), be cancelled by REC.

3.2.  FaceValue: The face value of each Bond is ` 1,000.
3.3.  Title:
3.3.1 In case of:

i) Bonds held in the dematerialized form, the person for the time being appearing in the Register of beneficial owners maintained by the Depositories.

ii) Bonds held in physical form, on rematerization of Bonds allotted in dematerialised form, the person for the time being appearing in the Register of Bondholders maintained by REC/ Registrar shall be treated for all purposes by REC, the Debenture Trustee, the Depositories and all other persons dealing with such persons as the holder thereof and its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, theft or loss of the Consolidated Bond Certificate issued in respect of the Bonds and no person will be liable for so treating the Bondholder.

3.3.2 No transfer of title of a Bond will be valid unless and until entered on the Register of Bondholders or the register of beneficial owners, maintained by the Depositories and/or REC or the Registrar to the Issue prior to the Record Date. In the absence of transfer being registered, interest and/or Maturity Amount, as the case may be, will be paid to the person, whose name appears first in the list of beneficial owners, Register of Bondholders maintained by the Depositories and/or REC and/or the Registrar to the Issue, as the case may be. In such cases, claims, if any, by the purchasers of the Bonds will need to be settled with the seller of the Bonds and not with REC or the Registrar to the Issue.

Need REC Application Form >> CLICK HERE

Application Acceptance Centers: Deposit your Application at any Bank – ICICI, SBI, HDFC, AXIS, etc.

Got questions, email us: info@nriinvestindia.com

Disclaimer: “Invest only after referring to final prospectus”.
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