MUMBAI: The waiting game for companies planning to raise long-term funds went awry after RBI's policy guidance made investors jittery, forcing bond yields to rise. Borrowing cost for corporates has gone up even after the interest rate cut by the Reserve Bank of India, the third time this year.
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The state-owned Steel Authority of India (SAIL), which tapped the bond market a day after RBI's policy announcement, has offered about 12 basis points higher interest rate than it would have paid had it raised money a week ago, dealers said.
SAIL mopped up Rs 420 crore at 8.35% with a three-year maturity; the company had offered 7.95% for a similar issuance in April. Although overall yield spikes forced higher funding cost, RBI's latest policy tone pushed it up further with no more rate cuts in sight. This week, two subsidiaries of Power Grid Corporation, another public sector undertaking, will float bonds. Besides, regular issuers, including Power Finance Corporation and Rural Electrification Corporation, may also hit the market. The interest rates these organisations will offer would also be higher, three dealers told ET.
Source - Times Of India
www.sevagiri.com
The state-owned Steel Authority of India (SAIL), which tapped the bond market a day after RBI's policy announcement, has offered about 12 basis points higher interest rate than it would have paid had it raised money a week ago, dealers said.
SAIL mopped up Rs 420 crore at 8.35% with a three-year maturity; the company had offered 7.95% for a similar issuance in April. Although overall yield spikes forced higher funding cost, RBI's latest policy tone pushed it up further with no more rate cuts in sight. This week, two subsidiaries of Power Grid Corporation, another public sector undertaking, will float bonds. Besides, regular issuers, including Power Finance Corporation and Rural Electrification Corporation, may also hit the market. The interest rates these organisations will offer would also be higher, three dealers told ET.
Source - Times Of India
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