whats the RIL’s dollar bond that reliance is coming upwith.?
This was a USD dollar bond issued to global investors mainly sovereign wealth fund, pension fund etc. Their need was usd 4 billion but got subscription of 11 billion. These bonds are for 10, 30 and for 40 years.
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What is rate of interest? Any idea?
For $1.5 billion for 10 years at a coupon or interest rate of 2.875%, $1.75 billion for 30 years at 3.625% and $750 million for a 40-year term at 3.750%.
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Hi, could you explain why the interest rate increased for the longer term loans isn’t it generally the opposite?
I am not an expert but my views are as follows
Longer the tenor generally the rates are higher. This is same with our standard fd the 10 year fd gives the highest rate. Most bank in india follow the same pattern
This is because people are blocking their money for 10 years and should be compensated higher
However this is not a rule. It all depends on the bank asset/liabilities position. Few banks used to give higher rates for shorter tenor as they thought the rates might come down in future.
To conclude generally longer tenor gets higher rate but this rule is not written on stone it can vary based on who needs the money
As an example one year back vedanta went to the market and was able to get usd funds for 14 percent when they announced the delisting
Hence credit quality also determines the interest rates