Bond sales for freezing Union Bank

corporate treasurers in India say they are delaying the sale of the bonds after the U.S. tax cuts President Barack Obama and sovereign debt crisis in Europe led to a reference point for their overall borrowing costs to a maximum of four months.

Rural Electrification Corp, the state-controlled lender for energy projects, delaying bond sales of $ 500 million through January, on "adverse market conditions," said Hari Das CFO in an interview Khunteta 03 December. Union Bank of India is carrying out an offer of discount on debt in Swiss francs, General Manager, VK Khanna said in an interview from 06 December. IDBI Bank Ltd. fees are considered, since the schedules issued $ 500 million in the first quarter of 2011.

"The money has to be at a reasonable cost," said Melwyn Rego, Executive Director based in Mumbai and head of international banking in the state-owned IDBI, in an interview from 06 December. "If costs are high, there will be any takers."

Sales of foreign currency bonds has been stalled in December, the income of the Indian companies note dollar rose to 5.12 percent, the highest since July 29 HSBC Holdings Plc indexes show. EU rescue of Ireland and the concern of the U.S. budget deficit helped increase demand for bonds moisture to the BRIC countries. The cost of credit default swaps, tied to the debt of the State Bank of India rose to 179 basis points on December 01, 155 on 8 November.

Offers debt

Borrowers in India have raised $ 8.7 billion in 2010 through international debt offerings, below the record $ 9.3 billion in 2007. It sold $ 2 billion in October and $ 2.2 billion in November.

"I'm sure we'll see back issues," said Philippe Petit, a senior investment manager at Pictet Asset Management Singapore, said in an interview Dec. 10. The firm manages $ 17 billion of emerging market debt. "There's an appetite, definitely in the market."

The perception of solvency of banks in India has held up better than their peers in other emerging markets. Swaps credit-default in the State Bank have fallen 45 basis points in the last six months to 172 on December 9, compared with 20 basis points for the Bank of China Ltd. and 28 basis points for Sberbank, Russia's biggest lender. The swaps are used to protect debt payments last.

The 10-year yield U.S. Treasury touched 3.33 percent last week, the highest since June 4 after Obama agreed to extend the U.S. tax cuts to boost growth. German Bund yields rose above 3 percent for the first time in seven months.

Bond Repurchase

India's bonds gained 10 years last week on speculation buyback central bank of 120 million rupees ($ 2.7 billion) of debt on December 9 facilitate a liquidity crisis. The yield of 7.8 percent due in May 2020 fell 9 basis points to 8.08 percent.

Banks borrowed an average 816 billion rupees a day in this quarter with the Reserve Bank of India's window to repurchase auction, compared with 239 million rupees in the last three months.

"Investors are probably taking some comfort in the hope that there will be more buybacks," said Krishnamurthy Harihar, treasurer of FirstRand Ltd. in Mumbai.

The rate of emerging market debt was 5.69 percent on Dec. 9, after reaching a maximum of three months of 5.74 percent on Nov. 30, according to an index compiled by JP Morgan Chase & Co. fell Production percent in 5123 to 4 November, the lowest since the bank began tracking the market in December 1997.

"The highest rates in the country lately not change the fact that it is still cheaper to sell the bonds in comparison with the costs of land," said Alice Chikara, a bond analyst at Elara Capital Plc in Singapore, in an interview on 10 December. "We see a strong line of publications next year."

Borrowing Costs

India's debt in domestic currency has returned 4.1 percent in 2010, according to indexes compiled by HSBC, the Reserve Bank raised borrowing costs by 150 basis points. Investors in China rose 1.2 percent, the smallest in the region, the indices show. Indian dollar bonds returned 9.6 percent, compared with 10.9 percent on average for the dollar debt in Asia, HSBC data show.

The rupee has advanced 3.3 percent against the dollar in 2010, making it cheaper for local companies to borrow abroad. The currency appreciated 0.1 percent last week to 45.0550 per dollar amid a report that showed industrial output rose more than expected in October.

Production factories, mines and utilities rose 10.8 percent in October from a year earlier after increasing 4.4 percent in September, the statistics office said in a statement in New Delhi on 10 December. The median estimate of 29 economists surveyed by us was for a gain of 8.5 percent.

'Far From Over'

The European Union and the International Monetary Fund agreed on a euro 85 billion (113 billion) rescue package for Ireland on 28 November. IMF Managing Director Dominique Strauss-Kahn, said in Geneva 08 December that Europe remains a "worrying" situation and the effects of global financial turmoil 'far from over. "

Union Bank to sell bonds "as and when we find the price is right," said Khanna. Rural Electrification Khunteta said the company is "looking at the second week of January" to sell their bonds.

"Going into next year, markets are more volatile than the macro fund is less conducive to the strengthening of the bond markets," Kenneth Akintewe, portfolio manager at Singapore-based Aberdeen Asset Management Asia Ltd., which manages 261 billion U.S. dollars in assets, said in an interview on 10 December. "From the perspective of India, you could see a slight delay."