Financial Daily from THE HINDU group of publications
Thursday, Aug 05, 2004
Financial Daily from THE HINDU group of publications Thursday, Aug 05, 2004 |
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Money & Banking
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Govt Bonds Rs 6,000-cr floating rate bonds auction Our Bureau
Mumbai , Aug 4 THE Government of India has announced the sale of Floating Rate Bonds, 2015 (II), for an aggregate amount of Rs 6,000 crore. The auction will be held on August 9. It also announced the sale of a new 30-year stock for a notified amount of Rs 2,000 crore through a yield-based auction using uniform price method, according to an RBI press release. The floating rate bonds will be of 11-year tenure and will be issued at par. The interest rate on the bonds will be calculated by adding a `spread' to a variable base rate. The `spread' will be decided in the auction to be conducted by the Reserve Bank of India and will remain unchanged during the currency of the bonds. The average rate of the implicit yields at cut-off prices emerging in the immediate previous three auctions of the `Government of India 364 day Treasury Bills' held prior to the relative annual coupon reset period will be the variable base rate for the floating rate bonds. The base rate for calculation of interest for the first coupon period commencing from August 10, 2004, to August 9, 2005, as per the aforesaid formula, is 4.62 per cent. The results of the auction will be announced on August 9.
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