Latest News | State Debt Auction Sees Sharp Fall in Pricing, Tenor, Supplies
Get latest articles and stories on Latest News at LatestLY. The weighted average cut-off or the interest rate payable annually by states on their 10-year debt securities fell by a steep 16 basis points to 7.42 per cent in the latest weekly debt auction on Tuesday.
Mumbai, Apr 25 (PTI) The weighted average cut-off or the interest rate payable annually by states on their 10-year debt securities fell by a steep 16 basis points to 7.42 per cent in the latest weekly debt auction on Tuesday.
The auction also saw a sharp decline in the tenor as well as in the quantum of debt offered by the four states that went to the capital market to raise funds.
At the last weekly auction of state debt in April, four states raised Rs 6,000 crore, which was only a third of the amount indicated in the auction calendar for this week.
The weighted average cut-off declined by 16 basis points (bps) to 7.42 per cent from 7.58 per cent recorded in the previous auction when it had risen by 7 bps from the week earlier, Icra Ratings said in a note.
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The agency attributed the sharp decline in the pricing to the drop in the weighted average tenor to 9 years from 17 years.
Accordingly, the spread between the 10-year state bonds and the yield on the benchmark government securities eased to 30 bps from 36 bps last week.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)