menu

Research

Credit Market

Aug 31st 2020

AAA PSU Credit Spreads Fall even as G-sec Yields Rise

linkedIn Logo
 
twitter logo

Credit Spreads Snapshot For The Week • 3 and 12 Months CD yields rose by 5-15 bps. • 3 and 12 Months NBFC CP yields fell by 8-15 bps. • Morgan Stanley India Primary Dealer Pvt Ltd issued Rs 6.3 billion, 4-year bond at 5.33%, 80 bps spreads • Bajaj Finance Ltd , AAA, issued Rs 100 million, 10-year bond at 7.25%, 219 spreads • FII debt utilization status stood at 31.78% of total limits. FIIs investment in bonds came down by Rs 45.51 billion

author dp
Paresh Nemade

 

Credit Spreads Snapshot For The Week

·         3 and 12 Months CD yields rose by  5-15 bps.

·         3 and 12 Months NBFC CP yields fell by  8-15 bps.

·         Morgan Stanley India Primary Dealer Pvt Ltd issued Rs 6.3  billion, 4-year bond at 5.33%, 80 bps spreads

·         Bajaj Finance Ltd , AAA, issued Rs 100 million, 10-year bond at 7.25%, 219 spreads

·         FII debt utilization status stood at 31.78% of total limits. FIIs investment in bonds came down by Rs 45.51 billion 

 

Government bond yields continued to rise last week on persistent sell-off. AAA PSU Credit spreads fell as corporate bond yields were steady. In the last one week, AAA PSU  spreads fell by 1-17 bps across the curve. HFCs spreads fell by 2-7 bps while AAA NBFC spreads for 2,3, and 5 years fell by 7-13 bps.

As per SEBI data, From March 2020 to July 2020 period Mutual Fund exposure to NBFC CPs rose 17.1% to Rs 512.68 billion .

During the week, IDBI Bank Ltd 10 year bond was trading at 9.34%, at spreads of 290 bps. Muthoot Finance 1 year bond was trading at 6.78%, at spreads of 299 bps,THDC LTd  Ltd 9 year bond was trading at 7.32%, at spreads of 108 bps

Spread Movement – 28th August 2020

PSU - Gsec (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

42

3

2

-14

2 Year

40

-1

1

-26

3 Year

62

6

-13

-12

5 Year

29

-4

4

-4

10 Year

47

2

-11

-14

 

 

 

 

 

NBFC - Gsec (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

129

-7

-11

-24

2 Year

85

-11

-28

-58

3 Year

126

-4

-16

-10

5 Year

114

-11

15

2

10 Year

146

-8

6

13

 

 

 

 

 

NBFC - PSU (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

87

-10

-13

-10

2 Year

45

-10

-29

-32

3 Year

64

-10

-3

2

5 Year

85

-7

11

6

10 Year

99

-10

17

27

 

 

 

 

 

HFC - Gsec (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

83

9

15

-18

2 Year

76

2

-13

-30

3 Year

96

3

-14

-21

5 Year

65

-8

3

-12

10 Year

82

-3

-8

-16

HFC - PSU (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

41

6

13

-4

2 Year

36

3

-14

-4

3 Year

34

-3

-1

-9

5 Year

36

-4

-1

-8

10 Year

35

-5

3

-2

 

Weekly Money Market Movement

Dates

-

04-09-20

28-08-20

Change (%)

Weekly FII Investment

(Rs billion)

9.28

-45.51

120.39%

-

-

-

-

Change in bps

AAA PSU yields (%)

3 Years

5.01%

5.28%

-27

 

5 Years

5.60%

5.86%

-26

 

10 Years

6.51%

6.83%

-32

AAA HFC yields (%)

3 Years

5.35%

5.63%

-28

 

5 Years

5.96%

6.23%

-27

 

10 Years

6.86%

7.15%

-29

CD yields (%)

3 months

3.24%

3.25%

-1

-

12 months

3.95%

4.00%

-5

CP yields (%)

12 Months

-

-

-

-

Manufacturing

4.20%

4.25%

-5

-

NBFC

4.40%

4.45%

-5

-

3 Months

-

-

-

-

Manufacturing

3.33%

3.35%

-2

-

NBFC

3.42%

3.45%

-3

FPI limit utilization

(In %)

31.89%

31.78%

11

 

Weekly Issuers 

Name of Issuer

Face Value (Rs mn)

Issue Size (Rs mn)

Maturity (Years)

Coupon Rate (%)

Credit Rating

Business Sector

Type of Issuer-Nature

Spreads (bps)

MANBA FINANCE LIMITED

1

100

1

13.25%

BWR-BBB+

Finance

NBFC

1037

KOGTA FINANCIAL (INDIA) LIMITED

1

300

1

9.50%

CARE-A-

Finance

NBFC

579

EDELWEISS HOUSING FINANCE LIMITED

1

1750

1

9.25%

ICRA-A+/Negative

Finance

Other

586

VERITAS FINANCE PRIVATE LIMITED

1

500

1

9.50%

CARE-A-

Finance

NBFC

579

PIRAMAL CAPITAL & HOUSING FINANCE LIMITED

1

1500

1

8.10%

CARE-AA

Finance

Other

455

SATIN CREDITCARE NETWORK LIMITED

1

500

1

10.20%

CARE-A-

Finance

NBFC

675

EDELWEISS FINANCIAL SERVICES LIMITED

1

10000

3

8%

 

Finance

Other

385

AADHAR HOUSING FINANCE LIMITED

1

1650

3

8.20%

CARE-AA

Finance

Other

406

KIFS HOUSING FINANCE LIMITED

1

250

3

9.81%

ACUITE-BBB+/Positive

Others

Other

578

INDIA GRID TRUST

1

4000

3

8.50%

CRISIL-AAA/Stable

Others

Other

438

ANNAPURNA FINANCE PRIVATE LIMITED

1

1000

5

11.30%

ICRA-A-/Stable

Finance

NBFC

631

HPCL-MITTAL ENERGY LIMITED

1

10000

5

7.15%

IND-AA+/Stable

Utilities

Other

204

 

Benchmark Bonds

Disclaimer:
Information herein is believed to be reliable but Arjun Parthasarathy Editor: INRBONDS.com does not warrant its completeness or accuracy. Opinions and estimates are subject to change without notice. This information is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The financial markets are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved. Unauthorized copying, distribution or sale of this publication is strictly prohibited. The author(s) of the content published in the site INRBONDS.com may or may not have investments in the assets discussed in the pages/posts.

Copyright © INRBONDS.com by Arjun Parthasarathy 2021

report image

NBFC Bonds Credit Spreads Look Attractive

Aug 8th 2017

Arjun Parthasarathy

report image

End of Credit Crisis Now here in Sight Despite Election Results

Nov 25th 2020

Arjun Parthasarathy