In the face of heavy supply from both states and the Centre, and with foreign portfolio investors (FPIs) leaving the country, domestic investors demanded states to cough up spreads of 140-200 basis points (bps) over the equivalent government securities — and the states acquiesced. For example, Kerala paid 8.96 per cent for a 15-year bond. The equivalent maturity government security closed at 6.92 per cent. In normal times, spreads are not more than 60-70 bps over the equivalent maturity government securities.