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Borrowing Cheap


The governments inaugural 10-year bond issue to raise Rs. 1 bn was oversubscribed by nearly eight times on Friday.
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The issue carries an annual 8.5 percent coupon, as opposed to the quarterly and half-yearly coupons offered on present treasury bonds.rn

rnThe Central Bank said it accepted Rs. 1 bn worth of bids at a 9 percent yield.

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However, on Fridays close, five-year bonds were trading at 9.
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80 percent on the secondary market.rn

rnDealers expect yields to slip further in line with Central Banks policy of lowering short-term rates and ample liquidity in the market.rn

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