Corporate Bond Market: Private Placements Slowed Last Week
Private placement of rupee-denominated corporate bonds slowed as issuers stayed on the sidelines in the run-up to RBI's credit policy on Wednesday. Indian companies borrowed Rs 7,600 crore via bonds this week as against Rs 13,600 crore last week, Bloomberg data showed.
An interesting trend this week was that 50 percent of the bond trades have a minimum maturity of 10 years. Bankers say that's because with not many rate cuts expected from here, issuers aren't hesitating in locking funds for a longer duration.
However, it was a busy week for overseas bond market. This week, Vedanta, Axis Bank and Canara Bank priced dollar bonds. An interesting trend is that Indian companies for the first time in a decade are choosing international bonds over overseas loans. That's becasue bonds are cheaper than loans and are offering longer duration money which helps companies to plan cash flows better.