The bonds, with a face value of Rs 1 lakh, offer an interest of 14.75 per cent. The redemption of the bonds would be at par in three instalments of 33 per cent, 33 per cent and 34 per cent at the end of fifth, sixth and seven year. Interest would be paid semi-annually.

The bonds are proposed for listing on the National Stock Exchange. The Credit Analysis and Research Ltd (CARL) has assigned a `AA 80' rating to the bonds. The allotment of the bonds would continue till the receipt of the targeted amount on May 31. The bonds will be serviced and repaid from the general revenues of the NMC, which has earmarked octroi collection from four points for the purpose. The amount would be kept in an escrow account. The bonds are taxable.

The NMC proposes to use the funds to finance its water supply project-stage I, undergroundsewerage project and public works department projects.

The water supply project envisages augmentation of supply from the Gangapur dam. The sewerage project includes the creation of an underground network of sewers from 200 mm diameter to 1,200 mm diameter pipes over a length of about 350 km. The public works comprise construction of flyovers at Shalimar junction and Bytco junction and construction of a truck terminus at Mumbai Naka and Adgaon Naka as well as a planetarium. Out of the Rs 100 crore to be generated, Rs 60 crore would be spent on the water supply scheme, Rs 20 crore on sewerage scheme and Rs 20 crore on other works.