The company, part of the Muthoot Pappachan group, has issued bonds with a term of 28 months, offering a coupon of 9.5% per year payable monthly, according to a press release.
“While the covered bond market has a considerable size of around 2.6 trillion euros worldwide, it is still at an emerging stage in India with only a handful of issues to date. allows us to open up to a large market that has an appetite for high-bond notes, “said Muthoot Fincorp chief executive Thomas John Muthoot.
The show was opened and closed on March 5.
Unlike debt-backed securities created as part of securitization, covered bonds continue to be the bonds of the issuer. The investor has recourse against the issuer and the guarantee also known as double recourse.
Muthoot Fincorp provides retail financing, primarily in the form of secured and unsecured loans to medium and low income clients.
The company claims to serve two million customers at its 3,600 branches across the country.