Government’s 50-year bond debut sees 4x demand – Times of India

by The Technical Blogs

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MUMBAI: The government on Friday introduced for the first time a 50-year bond worth Rs 10,000 crore, which saw over fourfold demand. The bonds were auctioned by RBI as part of the government’s weekly market borrowing programme. The cut off yield for these bonds was 7.46% per annum, RBI data showed.
So far 40-year government securities(G-Secs) were the ones with the longest maturity profile in India.The government said in the last week of September that it would introduce 50-year gilts. Market players had said that demand for ultra-long papers from insurance companies had prompted the government to introduce these bonds.
On Friday, against an auction amount of Rs 10,000 crore, the total demand for these bonds, from 216 bids, were worth Rs 40,200 crore, RBI data showed. These papers were allotted for 58 bids.
When the government announced its borrowing calendar for the second half of the current fiscal in September it said that 50-year gilts worth Rs 30,000 crore, spread over three months, will be auctioned before the end of the fiscal in March 2024.
The government had also said that for the first time it would introduce sovereign green bonds in its weekly auctions. The first one is set to be launched next week. Spread over four months, green bonds worth Rs 20,000 crore is set to be offered in auctions, the government’s borrowing calendar showed.



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