Mumbai: National Housing Bank has dropped plans to raise at least Rs 250 crore via 3-year bonds after receiving bids that did not match the bank’s expectations, a company source with knowledge of the deal told Reuters.
The best bid for the NHB paper was at 9.60% but the bank was expecting bids below 9.50%, a market participant who bid for the paper said, adding that the expectations were an ambitious target in such a choppy market.
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The company declined to comment on the bid and expectation levels of the issue.
The issue had a put/call option at the end of the first year and the bank had an option to retain oversubscription of up to Rs 250 crore from the issue.
Corporate bond yields have jumped after the government increased its borrowing for the second half of the fiscal year.
The benchmark five-year bond yield has risen 11 basis points to 9.60 percent since Thursday.
India will borrow Rs 2.2 trillion ($44.9 billion) in the second half of the fiscal year that begins on 1 Oct, the government said, significantly more than expected, sending bond yields and swap rates higher