India Inc set for record bond sales at $15-17 bn in 2013: RBS

MUMBAI: British bank RBS today said 2013 is set to top previous year records in terms of foreign debt issuance by Indian firms which have raised $ 12.5 billion in in the first half, as against $ 14.5 billion in the whole of last year.

RBS India, which tops the chart in terms of number of deals in H1, 2013 - at 10, amounting to $ 986 million - said it is working on many new issuances now and that the year may see the domestic corporates snapping up $ 15-17 billion.

The bank attributed the spike in 
forex bond issuance to the record low rates in the US and the unprecedented liquidity in the global financial markets.

The foreign lender said had it not been for the spike in US bonds yields, which shot up to 2.75 per cent from 1.6 per cent, since May 22, when the US Fed hinted at tapering off the easy money policy, and economic slowdown in India, it could have easily topped $ 20 billion.

"The domestic corporates have so far raised $ 12.5 billion in the first half of the year, against $ 14.5 billion they raised in the whole of last year.

"Most probably the year would close at $ 15-17 billion," RBS Asia Managing Director (debt capital markets) 
Manmohan Singh told reporters here.

He said the H1 period has also seen Asian companies, excluding Japan, raising more than $ 110 billion in foreign debt issuance, which in 2012 stood at $ 190 billion.

"This year so far has been breaking all the records, with increasing penetration of local currencies as issuance has touched a whopping $ 110 billion, and 2013 is on its way to become the best ever issuance.

"In 2012 we saw issuance amounting to $ 190 billion Asia ex-Japan 
debt market," RBS head of international banking and Managing Director for India and Southeast Asia Brijesh Mehra said.

The first half of 2013 saw 
Reliance IndustriesBSE 0.45 % issuing the continent's first perpetual bonds worth $ 800 million at 5.8 per cent. The year also saw Exim Bank tapping Australian debt market, raising 250 million Australian dollars.

The biggest issuer in the year was 
Bharti AirtelBSE 0.59 %, which mopped up $ 1.5 billion in March.

However, since mid-May the market dried up with the sole exception of the $ 500 million that Indian Oil netted towards July-end.