Hottest Ever Start to India Dollar Bond Sale Flags Pre-Vote Rush

(Bloomberg) -- Indian companies are off to the busiest start to a year ever for dollar bond sales, even as issuance of such securities falls in Asia overall.

The jump in Indian offerings, albeit from a low base, underscores how the nation’s firms are capitalizing on falling borrowing costs. The issuers are trying to nail down funds before national elections this spring, in case any unexpected outcomes push up financing costs later this year.

Read more about the rush before the elections here

Demand for Indian bonds has been high as spreads remain attractive for investors despite the recent declines. At the same time, those falls have encouraged new issuers to tap the market, according to Ajay Marwaha, portfolio manager at Sun Global Investments in London.

The Details

• Bharat Petroleum Corp., Indian Oil Corp. and State Bank of India have sold a total of $2.65 billion of bonds this month, the most for any previous similar period at the start of a year, according to data compiled by Bloomberg.
• State-owned Oil India Ltd. will also start a roadshow for a potential dollar security from Jan. 24.
• Average spreads for Indian dollar bonds have declined 30 basis points to 263 in January, reversing a 127 basis point rise in 2018, according to an ICE BofAML index.

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