Credit Spreads Snapshot For The Week
· 12 Month CP yield decline by 10-14 bps.
· L & T Ltd rated AAA, issued Rs 10 billion, 3-year bond at 6.72%, 54 bps spreads
· JSW Steel Ltd rated AA, issued Rs 10 billion, 10-year bond at 8.90%, 251 bps spreads
· FII debt utilization status stood at 52.37% of total limits. FIIs sold Rs 19.78 billion of bonds
Total Government Borrowing (Center plus States) could cross Rs 16 trillion in fiscal 2020-21, which could impact flow of funds to credit markets. RBI will have to keep liquidity extremely high to make sure that there is enough flow of funds to credits, enabligh spreads to stay stable and come off for bonds with highly elevated spreads. Read out note on Government Borrowing for Fiscal 2020-21 for details of government bond supply.