Bond issuance

Greater Hyderabad Municipal Corporation

Structured fund raising programme for a municipal corporation


Greater Hyderabad Municipal Corporation – Transaction Highlights


  1. GHMC, rated AA and had total fund raising program of Rs. 1000 crores for the Strategic Road Development Program (SRDP)
  2. Under SRDP Project, road network was planned to minimize the travel time, increasing the average journey speed and reducing pollution levels
  3. The project was non-revenue generating resulting in challenge to structure the cash-flow for the bonds servicing as well as complying with regulatory standards. In addition to the above there was no additional budgetary support from the Government.
  4. SBICAP devised an escrow account with preference to debt holders and separate debt servicing accounts to address investor concerns on ability to pay interest and principal. To ensure that the corporation observe financial discipline, certain covenants as to max borrowing that Municipal Corporation can take was stipulated such that it gives flexibility to Municipal Corporation to leverage it cashflow for future projects but at the same time ensures that the additional borrowing is managed in a manner that does not put pressure on GHMC financials as well as escrow structure.
  5. An investor meet was organised by us to explain the structure in detail to the investors and address that concern.

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