Oil Bonds Gain Currency

The 7-year Government of India Special Bonds, 2009, floated by oil companies have evoked interest in public sector banks and are trading in the secondary repo market in the range of 6.83-84 per cent.

With more demand than supply of these bonds in the market, the spread of these bonds over central government paper is expected to fall, dealers said. The current spread between these oil bonds and government securities of similar maturity stands at 21 basis points.

The total amount of oil bonds sold in the market is to the tune of Rs 5,561 crore, following Indian Oil Company (IOC) sale of its entire holding of Rs 5,276 crore, Bharat Petroleum Corporation