India’s overseas borrowing is set to rise to a record this year as the government joins companies to take advantage of declining interest rates globally and cut the cost of debt.
With interest rates in some markets slumping into negative territory and even junk bond yields falling to record lows, Indian offshore fund-raising could top the record $49 billion touched in 2014.
“Given the current run rate, this is set to be a record year of issuance out of India,” said Chetan Joshi, head of Debt Capital Markets at HSBC India. “Barring global geopolitical tensions of any kind resulting in a wider selloff in emerging markets, we expect Indian issuers to continue to benefit from this record low-yield environment that is currently in place for them.”
Offshore borrowing costs for Indian companies have reduced dramatically this year, on the basis of both yield and s ..
Companies have raised $21.64 billion through foreign currency bonds and loans so far this calendar year, according to data from Dealogic, a global analytics company. The data is updated as of July 11. India Inc. raised $27.1 billion in 2018 for both capital expenditure and refinancing.
Among the corporate borrowers are Reliance Industries, Reliance Jio Infocomm, Adani Ports and SEZ, India Railways Finance Corporation, Vedanta Resources and Shiram Transport Finance.
The US Treasury benchmark, a key gauge used to price emerging market bonds, yielded 3.24 per centon November 8. It slipped below 2%, the lowest level since November 2016, and now yields 2.09%. French government paper yielded a negative return, meaning investors will have to pay interest for the privilege of owning the sovereign debt.
“Last year, rising US interest rates limited the amount that Indian companies raised to a total of $6 billion via foreign currency bond issuances due to a ..
The London Interbank Offered Rate, or LIBOR, the benchmark rate against which offshore loans are priced, has also come off. The three-month LIBOR has dipped 50 basis points since December 20.
0 Comments