As the Reserve Bank of India eased policy rates by 100 basis points to 5.5% since February, yields in corporate bonds have been falling, as is the risk perception of these assets (except for the AAA paper with a 1-year tenure), showed the relevant data in the latest monthly bulletin.
For the five-year paper, the risk perception is the lowest, down 12 basis points, from mid May to mid June, suggesting the lowest (Variation in rates and spread over comparable G-secs) yields for the 5-year tenure.
This fall in bond yields amid a slow pass-through to lending rates has prompted firms to tap the bond market. Issuances of corporate bonds in April, after two rate cuts, were nearly three times the issuances in same month last year.
ET Bureau
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