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Credit Market

Aug 24th 2020

AAA Bond Spreads Trend Higher as G-secs Sell Off

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Credit Spreads Snapshot For The Week • 3 and 12 Months CDF yields fell by 5-9 bps. • 3 and 12 Months NBFC CP yields fell by 10-18 bps. • Magma Housing Finance Ltd, AA-, issued Rs 1.4 billion, 1.5-year bond at 8.48%, 436 bps spreads • SBI Cards and Payments Services Ltd, AAA, issued Rs 5 billion, 3-year bond at 5.75%, 140 spreads • FII debt utilization status stood at 32.32% of total limits. FIIs investment in bonds came down by Rs 9.17 billion

author dp
Paresh Nemade

 

Credit Spreads Snapshot For The Week

·         3 and 12 Months CDF yields fell by  5-9 bps.

·         3 and 12 Months NBFC CP yields fell by  10-18 bps.

·         Magma Housing Finance Ltd, AA-, issued Rs 1.4 billion, 1.5-year bond at 8.48%, 436 bps spreads

·         SBI Cards and Payments Services Ltd, AAA, issued Rs 5 billion, 3-year bond at 5.75%, 140 spreads

·         FII debt utilization status stood at 32.32% of total limits. FIIs investment in bonds came down by Rs 9.17 billion 

.

Government bond yields rose sharply last week on hawkishinflation comments by MPC members including the RBI Governor even as supply remained high thorough Rs 320 billion G-sec auction and Rs 200 billion of Switch/Conversion auction of G-secs. AAA Credit spreads rose while HFCs spreads declined. In the last week, AAA PSU  3-10 years spreads rose by 7-22 bps at the short end of the curve. HFCs spreads fell by 1-26 bps. AAA NBFC spreads for 3-10 years rose by 10-32 bps.

As per SEBI data ,in FY21 as on June 2020, total corporate bonds outstanding rose yearly by 7.79% to  Rs 33.22 trillion and by 2.10% against March 2020.

During the week, Sundaram Finance 10 year bond was trading at 7.64%, at spreads of 156 bps. Muthoot Finane 1.25 year bond was trading at 7.25%, at spreads of 315 bps, L&T LTd  Ltd 2 year bond was trading at 4.70%, at spreads of 60 bps

Spread Movement – 21st August 2020

PSU – G-sec (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

39

-13

-7

-14

2 Year

56

-0

0

-2

3 Year

82

5

7

5

5 Year

32

-9

22

-20

10 Year

60

-2

8

4

 

 

 

 

 

NBFC - Gsec (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

136

-7

-6

-7

2 Year

123

10

-10

-17

3 Year

155

13

10

18

5 Year

107

0

32

-8

10 Year

141

6

32

14

 

 

 

 

 

NBFC - PSU (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

97

6

1

7

2 Year

67

10

-10

-15

3 Year

73

8

3

13

5 Year

75

9

10

12

10 Year

81

8

24

10

 

 

 

 

 

HFC - Gsec (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

69

-4

-26

-25

2 Year

93

-3

0

-12

3 Year

113

-0

-2

8

5 Year

63

-9

-5

-17

10 Year

98

-2

-1

6

HFC - PSU (Spread)

Current Spread

1-Day Change

1-Week Change

1-Month Change

1 Year

30

9

-19

-11

2 Year

37

-3

0

-10

3 Year

31

-5

-9

3

5 Year

31

0

-27

3

10 Year

38

0

-9

2

 

Weekly Money Market Movement

Dates

-

21-08-20

14-08-20

Change (%)

Weekly FII Investment

(Rs billion)

-9.17

-7.58

-20.98%

-

-

-

-

Change in bps

AAA PSU yields (%)

3 Years

5.17%

5.05%

12

 

5 Years

5.80%

5.40%

40

 

10 Years

6.78%

6.56%

22

AAA HFC yields (%)

3 Years

5.48%

5.43%

5

 

5 Years

6.11%

5.98%

13

 

10 Years

7.16%

6.98%

18

CD yields (%)

3 months

3.20%

3.29%

-9

-

12 months

3.85%

3.90%

-5

CP yields (%)

12 Months

-

-

-

-

Manufacturing

4.10%

4.20%

-10

-

NBFC

4.30%

4.40%

-10

-

3 Months

-

-

-

-

Manufacturing

3.27%

3.35%

-8

-

NBFC

3.40%

3.58%

-18

FPI limit utilization

(In %)

32.32%

32.43%

-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)

ABANS FINANCE PRIVATE LIMITED

0.1

24.3

1

13%

 

Finance

NBFC

986

BELSTAR MICROFINANCE LIMITED

1

250

1

9.50%

CARE-A+

Finance

Other

571

PNB HOUSING FINANCE LTD

1

11150

2

7.75%

IND-AA/Stable

Finance

Other

363

IIFL HOME FINANCE LIMITED

1

1000

2

8%

CRISIL-AA/Negative

Finance

Other

388

IIFL FINANCE LIMITED

1

6000

2

8%

CRISIL-AA/Negative

Finance

Other

388

MANAPPURAM FINANCE LIMITED

1

3000

2

8.35%

CRISIL-AA/Stable

Finance

NBFC

423

JM FINANCIAL CREDIT SOLUTIONS LIMITED

1

1000

2

8.75%

ICRA-AA/Stable

Finance

Other

463

DVARA KSHETRIYA GRAMIN FINANCIAL SERVICES PRIVATE LIMITED

1

250

2

10.90%

CARE-BBB

Finance

Other

678

MUTHOOT FINCORP LIMITED

1

3250

2

9.35%

CRISIL-A/Stable

Finance

Other

545

IKF FINANCE LIMITED

1

300

2

9.10%

CARE-A

Finance

Other

529

SAMBANDH FINSERVE PRIVATE LIMITED

1

50

2

12.50%

BWR-BBB-

Finance

-

898

PIRAMAL CAPITAL & HOUSING FINANCE LIMITED

1

500

2

7.85%

CARE-AA

Finance

Other

373

MAGMA HOUSING FINANCE LIMITED

1

1400

2

8.48%

CARE-AA-

Finance

Other

436

INDOSTAR CAPITAL FINANCE LIMITED

1

2000

2

8.95%

CARE-AA-

Healthcare

NBFC

483

MAS FINANCIAL SERVICES LIMITED

1

1000

2

9%

CARE-A+

Finance

Other

488

SVATANTRA MICROFIN PRIVATE LIMITED

1

250

2

9.20%

CRISIL-A+/Stable

Utilities

Other

508

ESS KAY FINCORP LIMITED

1

300

2

9.25%

CRISIL-A/Stable

Finance

Other

513

SBFC FINANCE PRIVATE LIMITED

1

250

2

9.30%

IND-A/Stable

Finance

Other

518

FIVE-STAR BUSINESS FINANCE LIMITED

1

500

2

9.50%

ICRA-A/Stable

Finance

Other

538

KOGTA FINANCIAL (INDIA) LIMITED

1

250

2

9.50%

CARE-A-

Finance

NBFC

538

AYE FINANCE PRIVATE LIMITED

1

100

2

10%

IND-A-/Stable

Finance

Other

588

SATIN CREDITCARE NETWORK LIMITED

1

500

2

10.25%

CARE-A-

Finance

NBFC

613

MADURA MICRO FINANCE LIMITED

1

500

2

10.50%

ICRA-BBB+ (Under rating watch with positive implications)

Finance

NBFC

638

AROHAN FINANCIAL SERVICES LIMITED

1

500

2

10.50%

ICRA-A-/Stable

Finance

NBFC

638

PIRAMAL CAPITAL & HOUSING FINANCE LIMITED

1

1500

2

7.85%

CARE-AA

Finance

Other

388

TOYOTA FINANCIAL SERVICES INDIA LIMITED

1

1750

2

5.65%

ICRA-AAA/Stable

Finance

NBFC

165

BAJAJ FINANCE LIMITED

1

3500

2

5.20%

CRISIL-AAA/Stable

Finance

NBFC

118

P.N.R. HOUSING LIMITED

0.1

1

2

12%

 

Utilities

Other

843

BAJAJ FINANCE LIMITED

1

20000

3

5.70%

CRISIL-AAA/Stable

Finance

NBFC

135

VEDIKA CREDIT CAPITAL LTD

1

200

3

13%

ACUITE-BBB+ (Under rating watch with negative implications)

Utilities

Other

865

POWER FINANCE CORPORATION LTD.

1

5000

3

5.47%

CARE-AAA

Finance

NBFC

124

KHUSH HOUSING FINANCE PRIVATE LIMITED

1

100

3

11.25%

CARE-BBB

Finance

Other

690

CAPSAVE FINANCE PRIVATE LIMITED

1

200

3

9.18%

ACUITE-A-/Stable

Finance

NBFC

515

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA

1

5000

3

4.90%

ICRA-AAA/Stable

Finance

Bank

64

KOTAK MAHINDRA PRIME LIMITED

1

1000

3

5.50%

CRISIL-AAA/Stable

Finance

NBFC

127

AADHAR HOUSING FINANCE LIMITED

1

3000

3

8.20%

CARE-AA

Finance

Other

385

PRISM JOHNSON LIMITED

1

750

3

9.75%

IND-A

Industrial

Other

540

SBI CARDS AND PAYMENT SERVICES LIMITED

1

5000

3

5.75%

ICRA-AAA/Stable

Finance

NBFC

140

NANDINI BUILDHOME CONSORTIUM PRIVATE LIMITED

5

600

3

16.73%

 

Utilities

Other

1373

LENDINGKART FINANCE LIMITED

0.5

225

4

12.39%

ICRA-BBB+/Stable

Finance

Other

769

SAMUNNATI FINANCIAL INTERMEDIATION & SERVICES PRIVATE LIMITED

0.005

506.25

5

12.39%

CRISIL-BBB+/Stable

Utilities

Other

729

STATE BANK OF INDIA

1

89310

15

6.80%

CRISIL-AAA

Finance

Bank

25

TMF HOLDINGS LIMITED

1

1000

Perpetual

8.76%

CRISIL-AA-/Negative

Finance

NBFC

256

 

Benchmark Bonds

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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

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