Covered bonds help sub-AAA issuers raise cheaper funds

Covered bonds help sub-AAA issuers raise cheaper funds

Mumbai: India’s bond market has had an unintended positive impact from Covid-19 — a surge in the issue of covered bonds, which offer better protection against defaults, by companies that do not enjoy the top rating. Investors in covered bonds have the right over a pool of assets held by the issuers, primarily non-bank lenders, in case of a default. The issue of these instruments has risen five-and-a-half times to Rs 2,200 crore last fiscal

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