HIGHLIGHTS OF THE ISSUE OF TAX FREE POOLED FINANCE DEVELOPMENT BONDS UNDER POOLED FINANCE DEVELOPMENT FUND SCHEME OF GOVERNMENT OF INDIA

• Tax Free – Interest on Bond is exempted under section 10 (15) (vii) of the Income Tax Act, 1961.
• Rate of Interest : 7.25% p.a. payable annually.
• Tenure : 10 Years (Principal Moratorium - 5 Years)
• Credit Rating: “AA Ind (SO)” by Fitch Ratings India Pvt. Ltd. Instruments carrying these rating are considered to offer adequate Safety for timely servicing of debt obligations.
• Water and Sanitation Pooled Fund, registered in 2002 as a Trust under provisions of the Indian Trust Act, 1882.
• First Pooled Finance Entity in India.
• First Pooled Finance Entity to issue Pooled Bonds in 2002 in India.
• The Government of Tamil Nadu has designated the WSPF as the State Pooled Finance Entity under Pooled Finance Development Fund (PFDF) Scheme of Government of India.
• The above issue is the first Tax Free Pooled Finance Development Bonds under Pooled Finance Development Fund Scheme of Government of India in the FY 2007-08
• Wholly owned by Government of Tamil Nadu with a professional management of Tamil Nadu Urban Infrastructure Financial Services Ltd. (TNUIFSL). TNUIFSL is also managing other funds namely Tamil Nadu Urban Development Fund (TNUDF), Grant Fund –I, Grant Fund-II & Grant Fund – III.
• Professional Management has ensured a cherry picking approach to financially viable projects.
• Urban Local Bodies to be refinanced have an excellent repayment record to previous lending by WSPF/TNUDF.
• The issue is backed by an escrow mechanism to ensure timely payment of interest and principal. This is supported by creation of a DSRF (Debt Service Reserve Fund) by the assisted ULBs and Credit Rating Enhancement Fund (CREF) by the Issuer.
• A sum of Rs. 9.80 crores have been deposited under WSPF Credit Rating Enhancement Fund Account on 21st February 2008.
• Any shortfall in the payments into the designated bond service account would be made up from future accrued State Finance Commission Devolutions to the respective Urban Local Bodies.
• TNUDF will support the difference in cash-flows arising due to different maturity profiles by way of deferred loan.