Yes Bank Scraps $500mn Bond Issue Amid Investor Demands for Higher Yields
Yes Bank has withdrawn its plan to raise $500mn through three-year US dollar bonds. Investors had demanded higher yields amid a rush of Indian lenders seeking to tap the dollar debt market.
The Reserve Bank of India's decision to bring forward the closure of its dollar deposit window has contributed to investors' demands for higher yields.
Indian banks have been rushing to complete dollar bond sales, with much of the proceeds expected to be used to provide leverage to customers depositing funds under the RBI's discounted dollar deposit scheme. The scheme closes on August 31.
CreditSights estimated fair value for Yes Bank's proposed notes at a spread of 170-180 basis points over US Treasuries, implying a yield of around 6.035%-6.135%. However, investors were demanding a spread of around 200 basis points.