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Govt may price 1st tranche of sovereign bonds at $3-4 billion

July 16
13:29 2019

The government’s first tranche of overseas sovereign bonds might be issued at $ 3-4 billion, Business Standard reports. The bonds will likely be issued simultaneously at financial hubs such as London, New York, Singapore and Hong Kong.

Finance Minister Nirmala Sitharaman had announced the Centre’s intention to issue overseas sovereign bonds during her maiden Budget presentation on July 5.

The move is likely to help the government take advantage of the excess liquidity in global markets and create additional space for corporate bonds in the Indian market.

Moneycontrol could not independently verify the story.

Meeting with investment banks will begin in August and discussions will take place to decide which currency the bonds should be linked to, the article quotes government officials as saying.

“The contours of the instrument will be finalised by October, after which the roadshows will commence to attract large institutional investors,” one of the officials added.

Sitharaman, Minister of State for Finance Anurag Thakur and Finance Secretary Subhash Chandra Garg will participate in the roadshows.

Recently, Garg said the maximum limit of the foreign sovereign bonds will be 10 percent of the Centre’s budgeted gross borrowing requirements of around $ 7 lakh crore.

The proposal to raise overseas debt has come under criticism. Former Reserve Bank of India (RBI) Governor Raghuram Rajan said the plan comes with several risks but no real benefit.

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