Global Banking News-January 15, 2018--State Bank of India announces capital raising for affordable housing through
long-term bondsThe additional issuance of bonds in the ultra-long sector is in keeping with the commitment that the Government made in Budget 2017 to reallocate short-term issuance towards
long-term bonds in order to lock in low funding costs and reduce refinancing risk.
It'sobvious that
long-term bonds have higher risks as it's harder to predict the forthcoming of the market.
Tuesday, Government took another loan from the domestic creditors with long-term deadlines, from 10 to 15 years, and from the Ministry of Finance explained that these
long-term bonds are mainly issued on the request of the pension funds.
Yet as rates rise, investors will see the market value of their
long-term bonds drop sharply.
My warning about losses from holding or investing additional funds in bonds may have been a bit early, but investors this year have lost money, in
long-term bonds and bond funds.
placement of these
long-term bonds will take place in Central Bank.
Italy : Italy's borrowing costs were down on Wednesday in a sale of medium- and
long-term bonds that raised 6.
5 billion in medium and
long-term bonds at lower rates: Italy borrowed 6.
In addition, Uni-President Enterprises and Taiwan Power have rushed to issue corporate bonds recently, as they believe domestic interest rates are unlikely to drop further and issuance of
long-term bonds at present can save long-term funding cost.
Noting that the bank had repaid $500 million in debt in March 2011, he added that 85 per cent of short-term bond holders have agreed to swap into
long-term bonds.
While the short-term market is relatively unscathed,
long-term bonds which typically pay the higher rates have been hit hard.
