The Commercial Paper Funding Facility's special purpose vehicle will purchase higher rated, three-month unsecured and asset-backed paper from eligible bank, corporate, special-purpose entity, and municipal issuers using financing from the New York Federal Reserve. The vehicle, which was announced on March 17, will begin making purchases on Tuesday according to the New York Fed.
In September, CP issuances dropped to Rs 54,535 crore, from Rs 1.23 lakh crore in August and Rs 1.3 lakh crore in July.
Sakshi Batra does a 3-point analysis on what has led to the dip in sales and what’s the outlook on the commercial paper market.
In its bid to widen the bond market, the Reserve Bank today relaxed commercial paper (CP) issuances by lowering the minimum required credit rating to A3 from A2 as well as the ticket size from Rs 10 lakh to Rs 6 lakh.
Rating agency ICRA today assigned AAA (stable) investment grade to the Rs 5,000 crore NCD programme of Citicorp Finance (India) Limited.
Since the beginning of 2015, the RBI has cut the repo rate by 175 basis points to 6.25 percent, but only a small part of that has been passed on to the borrower, despite the fact that the government has also reduced the rates on small deposit schemes and banks themselves have been slashing term deposit rates from time to time.
Last month, the company had issued the commercial paper in favour of HDFC Bank with maturity date as October 10.
Meeting corporates' credit needs would emerge as a challenge, unless the corporate bond market develops rapidly, diversifying the risk across market participants other than banks.
The move toward marginal cost of funds methodology for interest rate on advances is aimed at ensuring faster transmission of changes in RBI policy rates to banks' lending rates
"Our CP portfolio was only Rs 7,000 crore at the end of the June quarter. This rose to Rs 23,000 crore as of end-September," the bank's Deputy Managing Director and Chief Financial Officer Anshula Kant told PTI.
As per the report, financial services segment continued to lead in the debt market with a share of above 72 per cent.
Shares of SKS Microfinance were trading at Rs 458.70 apiece, down 1.16 per cent from their previous close on the BSE.
"The balance USD 1.5 billion shall, however, continue to be part of the total corporate debt limit of USD 51 billion and will be available to eligible foreign investors for investment in corporate debt," Reserve Bank of India said.
Commercial paper and the certificates of deposit market pricing, which were earlier in the range of 8-9 percent, would certainly move beyond the cut-off in the RBI auction of short-term paper
Reliance Industries, L&T Finance Holdings and Tata Capital, part of the Tata conglomerate, have bought back around a combined Rs 2175 crore of debt since late July, dealers said.
ICRA has revised the rating from [ICRA]A+ to [ICRA]A assigned to Rs 700 crore Non-convertible Debenture (NCD) programme and Rs 425 crore long term bank lines of PTC India Financial Services Limited (PFS). The outlook on the long-term rating is 'Stable'.
Ravi, CFO, Mahindra & Mahindra Financial Services, was optimistic about maintaining growth and observed that there was sufficient liquidity in semi-urban and rural India. Ravi also ensured that the company was able to maintain the low NPAs from the start of the year.
Private sector Axis Bank today said it has extended its USD 200 million US Commercial Paper (CP) programme by one year.