Future Retail, India^s largest modern retailer, has signed a unique bond deal with Axis Bank, from which it raised Rs 300 crore recently. The company will reward the bank for holding the bond till maturity by paying a higher premium on the principal amount. The company will pay a coupon of 10.10 per cent on the bonds on a quarterly basis.
However, the bondholder will receive a premium on the face value of the bonds at the time of maturity, resulting in a higher payout of 10.75 per cent, said officials familiar with the deal. Future Retail, which is refinancing debt to take advantage of falling interest rates in the country, raised the bonds in two tranches — Rs 120 crore and Rs 180 crore — with tenures of five and six years, respectively. The bonds have put and call options at the end of three years.