INSUBCONTINENT EXCLUSIVE:
Weighted average cost of borrowings across states has shown good growthAfter falling marginally for two weeks, the cost of debt-funds for
the states jumped again as the weighted average cost of borrowings rose by 37 bps to a one-month high of 6.80 per cent in the auction on
Tuesday compared to the last week.At the weekly auction of state development loans, six states raised just Rs 8,000 crore, which is 41 per
lower-than-indicated issuance.Aditi Nayar, the chief economist at the rating agency, said the spread between the 10-year state debt and the
G-secs eased to a 24 month-low of 45 bps from 51 bps last week, while the weighted average cost of their borrowings jumped by 37 bps to 6.80
per cent over the past week.Seven of the 13 states that initially indicated their participation in the auction did not raise funds, even as
Telangana borrowed Rs 500 crore more than indicated, she said.According to another agency Care Ratings, the market borrowings by the states
As many as 29 states/UTs have cumulatively raised (except Odisha) Rs 4,19,900 crore so far this fiscal, down 18.4 per cent on-year from Rs
5,14,600 crore.According to Care, the weighted average cost of borrowings, across states and tenures, rose to 6.80 per cent, which is a
one-month high while the weighted average yield of the 10-year bonds was stable at 6.84 per cent at last week's level.
