Indian corporate bond yields closed little changed on
Monday, with investors preferring to stay on the sidelines as liquidity in the
banking system remained tight.
The five-year benchmark corporate bond yield ended unchanged
at 9.44 percent, while the 10-year bond closed 2 basis points lower at 9.30
percent.
Indian corporate credit issuance is expected to gradually
recover this week after the central bank desisted from signaling any near term
cut in policy rates, dousing hopes that borrowing costs will decline soon.
National Bank for Agriculture and Rural Development (NABARD)
plans to raise 7 billion rupees through three-year bonds at 9.48 percent, three
sources with direct knowledge of the deal said on Monday.
But traders said that issuance was slow because of tight
liquidity conditions.
"A lot of issuers are waiting for better liquidity
conditions to hit the market, especially in the private sector," a senior
dealer with a mutual fund said.
Indian Railway Finance Corp (IRFC) received first-day bids
for more than seven times the base amount offered in its sale of retail bonds,
signaling continuing appetite for debt from state-own firms despite lower
returns.
IRFC is looking to raise atleast 30 billion rupees via a 10-
and 15-year tax-free public bond issue, which has a green shoe of 33 billion
rupees.
The spread between the 10-year corporate bonds and
government debt of the same maturity widened to 81.24 basis points from 77.26
basis points on Friday.
Total volume in the corporate bond market was 20.97 billion
rupees, higher than Friday's 10.30 billion rupees.
Source: http://www.reuters.com/article/2012/01/30/india-markets-corpbonds-idUSL4E8CU4TY20120130
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