India Credit Market Has Been Stung by Bankruptcy Suspension
- Local firms due to repay record amount of rupee bonds in 2020
- Rupee note spreads jumped on suspension of bankruptcy filings
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Since India announced last month that it would temporarily suspend filings under its insolvency law amid the pandemic, credit investors have grown concerned that some weaker borrowers may use the development as an excuse to delay or avoid debt payments.
Yield premiums jumped after Finance Minister Nirmala Sitharaman unveiled the suspension, and the extra spread that investors demand to hold short-term AA rated debt over AAA notes has risen to its highest in about nine years.