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Bond yields tread water ahead of Rs 16,000 crore debt sale

27 Apr 2012 Evaluate

Bond yields were treading water as traders waited for Rs 16,000 crore debt sale auctions, to be held in the later part of the day.  Meanwhile, some caution also crept in tracing the momentum of US Treasury yields.

On the global front, US Treasuries prices rose in Asia on Friday, after Standard & Poor's cut Spain's credit ratings added to fears about the ability of some European countries to continue financing their debt. S&P's cut Spain's ratings by two notches to BBB-plus due to its deteriorating public finances.

Meanwhile, Brent crude dropped on Friday to trade just above $119 a barrel on renewed fears about the state of the debt-ravaged euro zone economies following a downgrade of Spain's credit rating.

Back home, the yields on 10-year benchmark 8.79% - 2021 bonds was down 1 basis point to 8.65% from its previous close of 8.66% ahead of Rs 16,000 crore worth ($3.05 billion) debt sale.

The benchmark five-year interest rate swaps were down 3 basis points at 7.61% from its previous close of 7.64% on Thursday.

The Government of India have announced the sale (re-issue) of four dated securities for Rs 16,000 crore on April 27, 2012 (i) “8.24 percent Government Stock 2018” for a notified amount of Rs 4,000 crore (nominal) through price based auction, (ii) “8.79 percent Government Stock 2021” for a notified amount of Rs 7,000 crore (nominal) through price based auction (iii) “8.28 percent Government Stock 2027” for a notified amount of Rs 2,000 crore (nominal) through price based auction and (iv) “8.33 percent Government Stock 2036” for a notified amount of  Rs 3,000 crore (nominal) through price based auction. The auctions will be conducted using uniform price method. The auctions will be conducted by the Reserve Bank of India, Fort, Mumbai on April 27, 2012 (Friday).

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