India Inc set for record bond sales at $15-17 bn in 2013: RBS
Mumbai: British bank RBS Tuesday said 2013 is set to top previous year records in terms of foreign debt issuance by Indian firms which have raised USD 12.5 billion in in the first half, as against USD 14.5 billion in the whole of last year.
RBS India, which tops the chart in terms of number of deals in H1, 2013 - at 10, amounting to USD 986 million - said it is working on many new issuances now and that the year may see the domestic corporates snapping up USD 15-17 billion.
The bank attributed the spike in forex bond issuance to the record low rates in the US and the unprecedented liquidity in the global financial markets.
The foreign lender said had it not been for the spike in US bonds yields, which shot up to 2.75 percent from 1.6 percent, since May 22, when the US Fed hinted at tapering off the easy money policy, and economic slowdown in India, it could have easily topped USD 20 billion.
"The domestic corporates have so far raised USD 12.5 billion in the first half of the year, against USD 14.5 billion they raised in the whole of last year.
"Most probably the year would close at USD 15-17 billion," RBS Asia Managing Director (debt capital markets) Manmohan Singh told reporters here.
He said the H1 period has also seen Asian companies, excluding Japan, raising more than USD 110 billion in foreign debt issuance, which in 2012 stood at USD 190 billion.
"This year so far has been breaking all the records, with increasing penetration of local currencies as issuance has touched a whopping USD 110 billion, and 2013 is on its way to become the best ever issuance.
"In 2012 we saw issuance amounting to USD 190 billion Asia ex-Japan debt market," RBS head of international banking and Managing Director for India and Southeast Asia Brijesh Mehra said.
The first half of 2013 saw Reliance Industries issuing the continent's first perpetual bonds worth USD 800 million at 5.8 percent. The year also saw Exim Bank tapping Australian debt market, raising 250 million Australian dollars.
The biggest issuer in the year was Bharti Airtel, which mopped up USD 1.5 billion in March.
However, since mid-May the market dried up with the sole exception of the USD 500 million that Indian Oil netted towards July-end.