Sales of Riskier Corporate Bonds Vanish in Indian Credit Scare
Sales of riskier rupee corporate bonds have all but dried up in recent months, in another negative for India’s slowing economy as companies struggle to raise cash.
Issuance of notes graded A+ and lower plunged 84% last quarter from a year earlier to 22.6 billion rupees ($329 million), the least in five years, according to data compiled by Bloomberg. Borrowing costs have also jumped for issuers with lower debt scores, as a crisis in India’s shadow banking sector saps investor demand for riskier securities.
Debt issuance is unlikely to get easier for weaker borrowers in coming quarters as a cash crunch sparked by an infrastructure financier’s unexpected default last year shows little sign of subsiding, according to JM Financial Products Ltd. A funding shortage in the corporate sector and rising investor concern about defaults add to woes for Asia’s third-biggest economy, whose growth slowed to a
five-year low in the first three months of 2019.
https://www.bloomberg.com/news/arti...corporate-bonds-vanish-in-indian-credit-scare