This bond issue is open for public from December 26, 2011 and closes on January 11, 2012.

Ratings
These NHAI Bonds comw with AAA/Stable rating from CRISIL as well as CARE AAA by CARE and Fitch AAA with stable outlook by FITCH rating agencies.

NHAI is a completely autonomous body but comes under the Ministry of Road Transport and Highways from Government of India. It is also the only body in India which takes care of the highway work and projects throughout.

With these NHAI Bonds you can get tax benefits under section 10(15)(iv)(h).

Interest Rate
You can earn an interest rate of 8.20% and 8.30% p.a for a tenor of 10 years and 15 years respectively.

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About PFC

Power Finance Corporation Limited (PFC) is one of the leading financial institutions in India which targets the infrastructure segment.  It is a Govt. of India undertaking company.  It is an infrastructure finance company with the NBFC-ND-IFC status.  As of September 30, 2010 they have the NPAs of 0.01% of the total loan portfolio.

Issue Open and Close

The current tranche of bond issue from PFC is open to public from February 24, 2011 and the issue closes on March 22, 2011.

Interest Rate
The rate of interest will be 8.3% for the 10 year tenure bonds while it will be 8.5% for the 15 year tenure.  Both the option comes with the cumulative of interest and hence the interest earned will be much higher in that case.  These PFC Bonds come up with a lock-in period of 5 years which means that the investor can sell it back to the Power Finance Corporation after 5 years.

Safety & Rating

Since being a Government of India Undertaking, Power Finance Corporation Infrastructure Bonds surely scores high on safety part and the investors can surely invest in it without fearing about the same.  And also these Power Finance Bonds come with the following credit rating namely, AAA/Stable from CRISIL and LAAA with stable outlook from ICRA.  And hence this means they are highly secure to invest.

Holding Option

The Power Finance Corporation Long Term Infrastructure Bonds can be held in physical or demat form.  While for the physical format you will need to furnish all the KYC document but those were not needed for those opting for the DEMAT option.

Tax Saving

As we all know that the infrastructure bond comes with the additional option of saving up to Rs. 20,000 over and above the 1 lakh cap that was available till last year and this current bond qualifies for the same.  You can save up to Rs. 6180 if you invest Rs. 20,000 in this PFC Infrastrucure Bond for tax saving purpose.

If you have still not invested in any of the previous infra bonds issued by L&T, IDFC, or IIFCL yet, then this is a great opportunity to invest in these bonds solely for the purpose of saving tax.  Otherwise for the investment purpose you don’t have to restrict to just Rs. 20,000 only, instead you can invest over and above that as well but those investments will not attract any tax benefit though.

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Minimum Investment

The retail investors have the option of investing in one bond with a face value of Rs. 10,000 each and in multiples of Rs. 10,000 thereafter.  The minimum is 1 bond and the maximum is 50 bonds, i.e., Rs. 5 lakhs.  The same amount varies for the High Net Individuals (HNI) and others.  This issue is open for all Indian citizens but NRIs and PIOs cannot apply for the same this time.

Interest Rate

These SBI Retail Bonds attracts an interest rate of 9.75% p.a. for series 3 lower tier 2 bonds which comes with a maturity period of 10 years.  While the ones which has the maturity period of 15 years comes with an interest rate of 9.95% p.a.  The interest rate for non-retail investors would be 9.30% for 10 years and 9.45% for 15 years.

Bond Issue

These SBI Bonds will be listed in both the BSE and NSE stock markets.  SBI has also offered the call option in which they can buy back their bonds at much earlier time than that of the 10 years or 15 years.  You will need to have a DEMAT account in order to buy these bonds from SBI, as it is not available in physical form.

Call Option

SBI has the call option after 5 years for the series 3 bonds and 10 years for the series 4 option.  Which means that they have rights to buy back the bonds and will pay you back the principal along with the accrued interest.

Should We Buy?

The interest will be paid annually to the investors and there is no option of compounding the interest and hence the benefit of accumulating wealth and getting it back after 10 years or 15 years is nullified here.  There are also no tax benefits or tax exemptions in investing these bonds and therefore the income from it will be treated as additional income and will be taxed accordingly.

Hence the SBI Retail Bond can be ideal for those looking for regular income (read retired or senior citizens) from their investment corpus.  Also there is an imminent rate hike lurking around the corner and hence the fixed deposit rates will be further hiked to around 9% or more which makes it ideal for the regular investors looking to compound their investment as well as looking for a more liquid investment option rather than this bond issue.

But all said, this bond issue will surely be over subscribed due to the fact of its almost attractive interest rate , safety, and being able to sell these bonds at the secondary market, etc.   If you are looking for a tax saving bond issue, you can always look at the L&T Bond which is open now for the retail investors.

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This IIFCL or Indian Infrastructure Finance Company is wholly owned by the Indian government and hence the safety part is well taken care of on your investment.  Apart from these tax saving infrastructure bonds, IIFCL have come up with many other infrastructure bonds even before it was announced in the last budget and brought under the tax saving option.

Ratings:

This IIFCL Long term Infrastructure bond comes with the credit rating of AAA/Stable by CRISIL, the rating agency as well as CARE AAA by CARE rating agency which means they are very secure to invest in.

Investment Limit:

The face value for this bond issue is Rs. 1000.  You can invest up to Rs. 20,000 if your sole aim is to save tax otherwise you can invest any amount in it.

Interest Rate:

You can earn up to 8.3% of interest rate per annum for this infrastructure bond from IIFCL and just like its predecessors, the total duration to hold these bonds is 10 to 15 years but you have the option of selling it back to the company after 5 years or 7 years accordingly set forth by them.  The interest rate for the 10 years series is 8.15% while for the 15 years series is 8.30%!

If you are planning to go for any of the infrastructure bond issue to save tax, you can safely park it with IIFCL.  But the general consensus has been that it is not wise to go for these bonds considering the interest earned from these infra bonds are taxable and if you calculate them, the benefits of investing on these bonds are miniscule instead you can park that money elsewhere better!  If you are looking to invest in this IIFCL Bond, just contact your investment adviser for application form and submission as there it is not clearly or not at all mentioned at their website about the same.

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Interest Rate:

This bond series comes with the buyback option at the end of 5 years and 7 years exactly.  The frequency of interest is either annual or cumulative and the interest rate effectively is 8.20% p.a. and 8.30% p.a. respectively.

How To Invest:

To invest visit the above mentioned website and download the application form, print it and fill all the details as well as attach the necessary documents required for KYC documents like the address proof, ID proof and your PAN Card Copy and finally submit the application at the nearest L&T Infra Bond collection centre listed on the website.  Or to avoid all the hard work call the above number and they will help by contacting you directly including giving the application form and collecting it from your place.

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As per the last budget, these infrastructure bonds are eligible for tax savings under the section 80CCF for up to Rs. 20,000 per year.

Rating:

Brickwork Ratings India P LTD has rated this bond issue from IFCI Limited as BWR AA.

Registrars and Trustees:

Registrar to this IFCI issue is Beetal Financial & Computer Services (P) Ltd. And the trustee is Axis Trustee Services Limited.

Face Value:

Rs.  5,000/- per bond

Issue Price:

At par of Rs. 5,000/- per bond.  Minimum subscription is Rs. 5000 and in multiples of Rs. 5000 (1 bond) thereafter.  The buy back date being January 31, 2016 and every year thereafter up to January 31, 2020.  The interest for these bonds, if chosen the non-cumulative option, will be made via ECS, cheques or demand drafts as per the applicant’s choice.

Subscription Options:

• Option I – Non-cumulative and Buyback after 5 years
• Option II – Cumulative and Buyback after 5 years
• Option III – Non-cumulative and no Buyback
• Option IV – Cumulative and no Buyback

Interest Rate:

• For Option I and II – 8% p.a.
• For Option III and IV – 8.25% p.a.

These bonds are proposed to be listed on BSE and you will definitely need a demat account to buy these special IFSI Infrastructure bonds for tax saving purposes.  Since being unsecured yet redeemable non-convertible bonds, this IFCI Long Term Infrastructure Bonds– SERIES II do have its own adherent risks when investing and hence think and go ahead and buy them.  Also these special infrastructure bonds are useful for those only in the 30% tax brackets and the maximum tax benefit you can claim is Rs. 20,000 via these 80CCF bonds.  Else you can just ignore these and stick with your existing tax saving instruments or if you still want to go for it due to additional savings options, just go ahead and subscribed to these IFSI Bonds, they are almost worth it.

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Application Size:

The application size for the retail investors has been fixed as Rs. 5 lakhs, while for high network individual it has been fixed as Rs. 250 crore.

Application Size:

The minimum amount you need to invest in these bonds is Rs. 10,000, you can subscribe in multiples of Rs. 10,000 after that. It is necessary to have a Demat account in order to invest in these SBI bonds. You can hold the bond till maturity or sell it on the exchange if the market is favorable.  The allocation of bonds will be made on a first come first serve basis.

Options and Interest Rates:

SBI launches its retail bonds in two series – Series-1 Lower Tier II Bond and Series-2 Lower Tier II Bond. The series 1 offers an interest rate of 9.25% per annum and the series 2 offers an interest rate of 9.50% per annum. The tenor of series-1 is 10 years, and that of series-2 is 15 years. You can redeem the series-1 bonds after 5 years, and series-2 bonds after 10 years. The interest rate will increase by 0.50% if the bonds are not redeemed during the call option from SBI. The interest on both the series will be paid on April 2 of every year.

There will be a call option from SBI after 5 years for series I and after 10 for series II and if there is no call option from them, then the interest rate will increase by 0.50%.

Redemption Date:

Ten years from the deemed date of allotment and the redemption amount will be Rs. 10,000 for each bond and multiples of the same.

SBI Retail Bonds are different from the IDFC bonds and L&T Bonds because they are not covered under section 80 CCF like the IDFC bonds.  Hence, investment in this bond will not reduce your taxable income.  The interest from this bond will be treated as regular income and the tax should be paid for the same.

The SBI Retail Bonds are not fixed deposits and hence, they are not covered under deposit insurance. These bonds are not redeemable at the option of the bondholders, but can be redeemed when there is a call option from SBI.  They have also announced that more such retail bonds will be open for public in the coming months from them and hence you can go for this public offer or can wait for the next one soon.

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