information about perpetual bonds and masala bonds

1. SEFALI SINGH 107
SHIVANI GOENKA 70

2.  FIXED INCOME SECURITY WITH NO MATURITY
DATE.
 KNOWN AS “PERP” OR”CONSOL”.
 NOT REDEEMABLE(EXCEPT ON CALL/PUT
OPTION ACTIVATION DATE).
 ISSUED BY BANKS AND INSTITUTIONS WHICH
ARE LOWER RATED.
 BANKS WITH LOWER CAPITAL ADEQUACY
RATIO HAVE BEEN ISSUING PERPETUAL BONDS
AT RATES AS HIGH AS 11% AND MORE.

4.  BONDS WHICH ARE ISSUED OUTSIDE INDIA
BUT DENOMINATED IN INDIAN RUPEES
RATHER THAN THE LOCAL CURRENCY BOND.
 KNOWN AS “RUPEE DENOMINATED BOND”.
 MASALA MEANS”SPICES” WHICH WAS USED BY
IFC AS IT EVOKES THE CULTURE AND CUISINE
OF INDIA.
 IT RAISED 1000 CRORE BONDS TO FUND
INFRASTRUCTURE PROJECT IN INDIA.
 HDFC WAS 1ST INDIAN COMPANY TO ISSUE
MASALA BONDS IN 2016.

5.  THEY ARE ISSUED TO FOREIGN INVESTORS
AND SETTLED IN US DOLLARS.
 CURRENCY RISK LIES WITH THE INVESTOR
AND NOT THE ISSUER.
 COST OF BORROWING IS LOW.
 BAD AFTER EFFECTS AS HIGH FOREIGN LOAN
EXPOSURE.
 RBI INCREASED THE CORPORATE BOND
INVESTMENT LIMIT BY EXCLUDING MASALA
BONDS.
 RECENTLY,PNB HOUSING FINANCE GOT
APPROVAL FROM ITS BOARD FOR RAISING
UPTO $1 BILLION MASALA BONDS.