LIC Housing Fin raises Rs 750 cr from bond sale

LIC Housing Fin raises Rs 750 cr from bond sale

LIC Housing Finance, the home loan arm of India's largest insurer, sold Rs 750 crore ($168 million) of 9.4 per cent bonds due in 2012, according to data compiled by Bloomberg.

The bond sale, the first after LIC Housing's former Chief Executive Officer Ramachandran R Nair was detained last month in a bribery and improper loan disbursal probe, is on more expensive terms than debt sold by the company before the arrest.

HSBC Holdings was the sole arranger to the sale, data show. LIC Housing raised Rs 366 crore on November 23, selling 10-year bonds at nine per cent.

The federal investigating agency arrested Nair and seven other bank and brokerage officials on November 24 in the probe.

Finance Minister Pranab Mukherjee had said on November 30 that investments made in LIC Housing's parent state-run Life Insurance Corporation of India were "safe."

"As a director, he can only recommend a loan," Nair's lawyer Shirish Gupte had said on November 29. "The decision to give the loan is taken by the company's board."

A court in Mumbai granted bail to Nair and the other accused on December 3.

Crisil, Care reaffirm highest ratings

Leading rating agencies Crisil and Care have reaffirmed highest credit ratings to the debt instruments of the company.

Care reaffirmed the existing Care AAA rating to the company's non-convertible debentures aggregating to Rs 18,322 crore. Crisil had reaffirmed its highest ratings on its debt instruments, bank loans, commercial papers and fixed deposit programme at AAA/FAAA/Stable/P1+, a release said here today.

While Care's rating came in yesterday, that of Crisil was given on November 29, the media release added. Care also reaffirmed the triple-A rating for its Rs 750-crore tier II bonds and Rs 1,600-crore upper tier II bonds.

Investors' trust in the company promoted by the nation's largest financial entity, the Life Insurance Corporation of India was shaken and its shares took a beating following the cash-for-loan scandal last month.

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