(Bloomberg) -- Yields on rupee-denominated corporate bonds surged to a 16-month high on Dec. 28 after the Indian government said it will borrow more this quarter to offset the impact of slower revenue. That's narrowed the gap between bond and loan prices, with the average yield on AAA-rated three-year corporate notes now just 42 basis points lower than the three-year lending rate at State Bank of India. Sandeep Bagla, associate director at Trust Group in Mumbai, expects companies to either choose loans or tap overseas markets to meet their funding needs after a record run of local-currency note issuance.
To contact the reporter on this story: Divya Patil in Mumbai at dpatil7@bloomberg.net.
To contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net, Chan Tien Hin
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