IDFC and National Housing Bank?paid less to sell three-year bonds this month, as corporate debt?costs in India head for the first drop since 2009 amid bets the?central bank will cut interest rates as early as next month.
IDFC, India?s biggest lender to transport networks and?utilities, issued 2015 notes at 9.05% last week, compared?with 9.37% in September, data compiled by Bloomberg show.
National Housing Bank, a state-owned builder of low-cost homes, sold similar-maturity notes at 8.95%, down from 9.05% in August. The extra yield demanded by investors to hold?three-year AAA corporate notes slid 71 basis points in 2012 to?104. A similar gauge fell 49 basis points to 154 in China.
BNP Paribas SA and Goldman Sachs Group predict the?Reserve Bank of India will cut the 8% repurchase rate?next month to arrest the worst slowdown in a decade in Asia?s?third-largest economy. Governor Duvvuri Subbarao said this month?policy makers? focus needs to shift toward supporting growth from containing inflation. The highest funding costs among major?Asian economies capped average gains in India?s factory output?at 1.1% in the first 10 months, the least since 2009.
?With RBI saying the policy stance is moving?towards supporting economic growth, there?s a general perception?of higher possibility of an interest-rate cut in January,? SJ?Balesh, a Mumbai-based senior director at IDFC, said in a phone?interview on December 24. ?A lot of top-rated private companies are raising funds from the corporate bond market because yields have?fallen significantly below banks? base lending rates.?
