Top corporate bond arranger expects spreads on highest-rated notes to widen

"We think the RBI will guide liquidity toward more normal settings, which could lead to spreads widening on corporate bonds," ICICI Bank's top official said

ICICI Bank Ltd., one of India’s top corporate bond arrangers, expects spreads on the highest-rated local notes to widen further as the central bank begins to withdraw emergency liquidity.
 

The extra yield investors demand to hold AAA rated company notes due in one year over comparable government securities jumped to the highest since October last week and remains near that level. That came after the Reserve Bank of India on Jan. 8 announced plans to drain excess cash from markets.

Easy liquidity and record-low borrowing costs have been a crucial lifeline helping many companies make it