Government securities 2

suri · February 10, 2021, 2:10pm

In Government dated bonds shown on coin what does FRB represent in “GOI FRB 2033” ?

Ragavendran_M · February 10, 2021, 2:26pm

It’s Floating rate bond.

suri · February 11, 2021, 5:35am

Does it mean the interest rate depends on the interest rate issued by RBI from time to time

Akash_Shah · February 11, 2021, 5:48am

@suri these FRB generally have variable base rate + spread. Spread is generally fixed at auction. Floating base rate is populated by RBI from time to time, based on results of auction of other securities.

For FRB 2033 formula is “Base rate equivalent to the average of the Weighted Average Yield (WAY) of last 3 auctions (from the rate fixing day) of 182 Day T-Bills, plus a fixed spread (1.22%).”

Hope this helps.