While close to $7.5 billion has been mopped up by companies and banks via offshore bonds in 2015 so far, this is smaller than the $15 billion or so raised in the corresponding period of 2014, reports Bhavik Nair in Mumbai. That’s partly because banks haven’t tapped the markets overseas as much as they did last year. Kaustubh Kulkarni, MD and head, debt capital markets, Standard Chartered, said banks may not use up their remaining refinancing requirements of close to $3.5 billion, partly due to the slow offtake of credit. But there are firms that have completed their roadshows — Power Finance Corporation for instance — and are waiting for an attractive price.
With markets extremely volatile and bond yields fluctutaing on concerns of a Grexit and the crash in the Chinese stock markets in late July—-these are tough times. Brijen Puri, MD and Head, Markets, at JP Morgan believes the yield on the 10-year US treasury yield, which has been moving in the range of 2.15% to 2.45% over the last few weeks, is likely to remain in that range. There is also the likely change in the stance of the Fed in September that could move yields. Puri believes the Fed will most likely hike rates though the pace may be slower than what the market is pricing-in.
Chetan Joshi, head of debt capital markets, at HSBC feels activity could remain muted in the near term but gain momentum in early September. Manmohan Singh, Head, debt capital markets, India and South East Asia at Royal Bank of Scotland says close to $18.6 billion may be raised by the end of the year.
Some first-timers may hit the markets once the earnings season is over while bankers believe the pharma sector will access the markets. Sun Pharma is also reportedly planning to raise between $500 million and $one billion.”Pharma could be the next sector to drive the Indian issuances in the global bond market driven by the merger and acquisition activity in this space,” RBS’ Singh observes. On July 22, Adani Ports and Special Economic Zone (APSEZ) priced its five-year bond issue at 195 basis points over the US Treasury to raise $650 million.