Mumbai: The Rs 200-crore bond issue of the National Housing Bank (NHB) has bombed. NHB, which is considered to be one of the sound and better financial institutions of the country, had to face this market reverse owing to the September 11 terrorist incidents.

NHB had entered the market with a Rs 200-crore priority sector bond offering .The issue opened on 14 September and closed on 26 September. The coupon rate was priced at the range of 8.5 to 9.1 per cent on an annualised basis. ABN AMRO Securities was the lead arranger and the other arrangers were I-Sec and SBI Capital Markets.

What is not know now are to what extent the issue was undersubscribed and NHB''s next course of action. However, as the yield to maturity (YTM) returns are now at pre-September 11 levels, NHB may continue with the issue.

Commercial banks have reduced the ceilings they have set for bonds and commercial papers due to the present market conditions, a reason why NHB and many other bond offerings will suffer.