Capital market regulator SEBI allows re-issuance of corporate debt

MUMBAI (Reuters) - India's capital market regulator said on Thursday it will allow companies to re-issue existing corporate bonds, in a move that is expected to avoid the fragmentation of liquidity in debt markets with multiple issuances.

Securities and Exchange Board of India (SEBI) had been widely expected to allow re-issuance of corporate bonds this year after first proposing a change in December.

Corporate issuers were previously not allowed to re-issue existing bonds, which traders had said was leading to a multitude of different bonds, most of which attracted limited trading volumes.

The announcement was contained in SEBI's minutes of its quarterly board meeting held earlier in the day.

The regulator said it will also enable call and put options in corporate bonds to attract more investors into the market.

For full statement see: http://bit.ly/1y2oCp6

(Reporting by Suvashree Dey Choudhury; Editing by Rafael Nam)