Return
to Story Page
To print: Select File and then Print from your
browser's menu
Our Banking Bureau
Mumbai, Dec 21: The Reserve Bank of India on Monday announced the third tranche of market loans by 15 state governments. The 10-year paper, carrying a coupon of 12.50 per cent, is being sold 25 basis points higher than a similar maturity central government paper. The last 10-year central goverment paper was floated at 12.25 per cent.
The Rs 1,719.50 crore state loan will be floated on December 28. The 12.50 per cent state development loan -- issued earlier on October 12, 1998 -- will be reissued at par in the tranche.
This effectively means the investor will have to pay the price of the security in addition to the accrued interest rates. Analysts said this is a good move by the RBI as it seeks to bring down the number of issues.
The new issue will have an impact on the call market, dealers said. "Call rates will be under pressure as the SDL will take away Rs 1,719.50 crore along with the Rs 5,000-6,000 crore outflow on account of the advance tax payments," a dealer with a primary dealer (PD)said.
However, dealers said the rates are unlikely to cross 9 per cent as refinance is available to PDs from the RBI. According to an RBI release, Bihar, which did not enter the market in the first tranche, is slated to pick up Rs 321.44 crore which will be the highest among the 15 states. Following Bihar is Karnataka which is slated to raise Rs 299.60, Uttar Pradesh (Rs 257.82 crore), Andhra Pradesh (Rs 150 crore) and Rajasthan (Rs 134.03 crore).
Other states which are slated to raise money are Assam (Rs 60 crore), Goa (Rs 10.41 crore), Gujarat (Rs 70 crore), Himachal Pradesh (Rs 64 crore), Kerala (Rs 19.22), Madhya Pradesh (Rs 51 crore), Maharashtra (Rs 51.46 crore), Orissa (Rs 98.58 crore), Tamil Nadu (Rs 51.34 crore) and West Bengal (Rs 80.60 crore).
An RBI release stated the interest for the period from December 28, 1998, to April 11, 1999, will be paid on April 12, 1999, and thereafter interest will be paid half yearly on October 12 and April 12 each year. The loans will be redeemable at par onOctober 12, 2008.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------