Page 9 - Debt

Sri Lanka's parl committee approves debt restructuring plan with amendments

Sri Lanka's parliamentary oversight committee comprising members from both government and opposition on Friday approved the proposed domestic debt restructuring (DDR) plan with certain amendments, as part of the efforts to revive the island nation's bankrupt economy. The majority of the Committee on Public Finance (COPF) approved the resolution following the second day of deliberations which began on Thursday, an official release said Earlier, the Cabinet approved the debt restructuring plan on Wednesday after which it was referred to the public finance committee in parliament. The committee approved the resolution by a majority subject to certain amendments made at the committee meeting held, the release said. The COPF approval was the last of the formalities before the resolution is set to be discussed in parliament on Saturday. President Ranil Wickremesinghe, who is also the finance minister, held a flurry of meetings with different sectors to apprise them of the DDR programme

India's external debt rises $5.6 bn to $624.7 bn at end-March 2023

India's external debt rose marginally to USD 624.7 billion annually at end-March 2023, although the debt-GDP ratio declined, as per a Reserve Bank data released on Friday. The external debt rose by USD 5.6 billion from USD 619.1 billion at end-March 2022. "The external debt to GDP ratio declined to 18.9 per cent at end-March 2023 from 20 per cent at end-March 2022," said the Reserve Bank's data on India's External Debt as at end-March 2023. Valuation gains due to the appreciation of the US dollar compared to the Indian rupee and major currencies such as yen, SDR, and euro were placed at USD 20.6 billion. "Excluding the valuation effect, external debt would have increased by USD 26.2 billion instead of USD 5.6 billion at end-March 2023 over end-March 2022," the central bank added. At end-March 2023, as per the data, long-term debt (with original maturity of above one year) was placed at USD 496.3 billion, recording a decline of USD 1.1 billion over its level at end-March 2022. The

Sri Lanka to spare banks in $19.8 bn local debt restructuring plan

Sri Lanka will spare banks from being part of its local debt restructuring plan because of the possible impact on deposits, while the bulk of the burden will be shared by the Central Bank and superannuation funds, officials said Thursday. Sri Lanka's Cabinet a day earlier approved a plan to restructure nearly half of its $42.1 billion local debt following a bailout agreement with the International Monetary Fund. A special Parliament sitting has been convened for Saturday to seek approval for the plan. The government has announced a bank holiday until next week to prevent any speculation-triggered bank run. Central Bank governor Nandalal Weerasinghe said the treasury bills owned by the bank will be converted into treasury bonds with a longer maturity period and the same has been proposed to superannuation funds. If those funds are unwilling to be part of the plan they may have to pay a 30% tax instead of the 14% special treatment effective now. Sri Lanka is also seeking to reduce ..

US public debt is projected to reach 181% of economic activity in 30 years

The Congressional Budget Office is giving the world a concerning look at the US government's ledgers: ever higher deficits, greater government spending and tax revenues that only begin to increase when existing tax cuts expire. The nonpartisan agency estimates in its latest 30-year outlook, released Wednesday, that publicly held debt will be equal to a record 181 per cent of American economic activity by 2053. That compares with a projected 98 per cent at the end of this budget year, a sign the government is getting more dependent on debt to pay for Social Security, Medicare, the military, infrastructure and an array of programs that benefit millions of households. The higher debt load is not all that shocking given the deficit spending of the past two decades. But the CBO figures do offer a bit of comfort in that annual deficits after 2042 are lower than forecasted in the agency's report from last year. This is because the primary borrowing and interest rate costs are lower than wha

SL's domestic debt restructuring plan approved by special cabinet meeting

Sri Lanka's special cabinet meeting on Wednesday unanimously approved the government's Domestic Debt Restructuring (DDR) plan under which the cash-strapped government aims to restructure USD 17 billion out of the total USD 41.5 billion external debt over five years. The proposed Domestic Debt Restructuring programme proposed by the Finance Ministry has been approved by the special cabinet meeting, a statement by the President's Office said. "All government MPs were notified a short while ago at the presidential secretariat. Next, the proposal will be submitted at the next parliament session for discussion, the statement said. The plan will now be referred to the public finance committee in Parliament ahead of Saturday's parliamentary session. Earlier, President Ranil Wickremesinghe, who is also the minister of finance, explaining the DDR programme said the government aims to restructure USD 17 billion out of the total USD 41.5 billion external debt over five years. Today's meeting

Adani eyes Rs 90,000 cr EBITDA in 2-3 yrs on the back of robust biz growth

Embattled Adani group is eyeing a 20 per cent year-on-year growth in pre-tax profits to reach Rs 90,000 crore EBITDA in 2-3 years on the back of robust growth in businesses ranging from airports to energy, according to a company note. Earlier this month, the group repaid loans aggregating USD 2.65 billion to complete a prepayment programme to cut overall leverage in an attempt to win back investor trust post a damning report of a US short seller. The ports-to-energy conglomerate is now looking at robust growth in sectors such as airports, cement, renewables, solar panels, transportation and logistics, and power and transmission, it said adding several of Adani's new infrastructure investments will also begin to fructify and generate cash in the coming years. Adani is expected to see an increase of more than 20 per cent in EBITDA on a consolidated basis in the coming years as it drives robust and sustainable growth across its business portfolio. Its target EBITDA of over Rs 90,000 ..

India's debt burden will be stable or decline slightly, says Moody's

Moody's Investors Service on Thursday said the key determinant of India's fiscal strength and the credit profile will be debt affordability and projected a downward trend for the debt burden. "As long as nominal GDP growth holds, India's debt burden will be stable or decline slightly," Moody's said. In a report, it said India's fast-growing GDP, which is estimated to average 11 per cent in nominal terms, is a key driver of the projections of a downward trend in the country's debt burden. "As in the past, the key determinant of fiscal strength and the credit profile will be debt affordability and in particular the proportion of revenue absorbed by interest payments," Moody's said. India has a relatively high level of general government debt, estimated at around 81.8 per cent of GDP for 2022-23, compared with the Baa-rated median of around 56 per cent. The country also has a low debt affordability, in terms of general government interest payments as a percentage of revenues, which f

After restoring OPS, debt-ridden Himachal hits market for Rs 800 cr loan

Despite facing financial restrictions, CM is saying the government is actively focused on resource mobilization by initiating measures to generate additional revenue for the exchequer

Explained: What's the US debt ceiling crisis

The US debt ceiling is a legal limit set by Congress on the amount of money the US government can borrow to pay its bills. It’s like a financial cap that the government cannot exceed

Despite heavy supply, debt cost slips marginally for states to 7.32%

Despite larger than notified supplies, the average cost for the states that hit the market on Tuesday will be less in terms of coupons, which slipped by 3 bps to 7.32 per cent. Twelve states have raised Rs 17,300 crore through state government securities in the auction held on Tuesday, which is a sharp 47 per cent higher than the indicated Rs 11,800 crore for this week in the auction calendar. In spite of that, the weighted average cut-off eased by 3 bps to 7.32 per cent from the last auction. The fall is also regardless of the fact that there was a mild rise in the weighted average tenor to 16 years from 15 years, Icra Ratings said in a note. The spread between the 10-year SGS and 10-year Central government security yield remained stable at 35 bps relative to the past week, Aditi Nayar, the chief economist and the head of research & outreach at the agency, said in the note.

Pakistan govt's debt swells by 34.1% to Rs 58.6 trillion: Central bank data

The Pakistan government's total debt has increased 34.1 per cent year-on-year to Rs 58.6 trillion at the end of April, according to the latest report by the country's central bank. The increase was 2.6 per cent on a month-on-month basis, Dawn newspaper reported on Tuesday. The domestic debt amounted to Rs 36.5 trillion (62.3 per cent) while the external debt accounted for a 37.6 per cent share with Rs 22 trillion at the end of April. On an annual basis, the increase in external debt remained 49.1 per cent, the State Bank of Pakistan (SBP) data showed. There was no change in the external debt figure from a month ago. Within the domestic debt, the largest share was of the federal government bonds that represented almost Rs25 trillion worth of loans. Other major contributors to the domestic debt were short-term loans (Rs7.2 trillion) and unfunded debt (Rs2.9 trillion) that included money borrowed through National Savings Schemes. Funds obtained through federal government bonds rose 3

Adani Group repays loans worth $2.65 bn to complete prepayment programme

Embattled Adani Group on Monday said it has repaid loans aggregating USD 2.65 billion to complete a prepayment programme to cut overall leverage in an attempt to win back investor trust post a damning report of a US short seller. In a Credit Note released on Monday, Adani Group said it has made a full prepayment of USD 2.15 billion of loans that were taken by pledging shares in the conglomerate's listed firms and also another USD 700 million in loans taken for the acquisition of Ambuja Cement. "The prepayment was done along with interest payment of USD 203 million," it added. Further, the credit update states that the promoters completed the sale of shares in four listed group entities to GQG Partners, a leading global investment firm, for USD 1.87 billion (Rs 15,446 crore). "The deleveraging programme testifies to the strong liquidity management and capital access at sponsor level even in volatile market conditions, supplementing the solid capital prudence adopted at all portfolio

Nava Ltd more than halves its total liabilities to Rs 1,707 crore

The settlement of arbitration dues from Zambia Electricity Supply Corporation Limited (Zesco) has contributed to an increase in the cash flow of the company

Himachal inherits Rs 75,000 cr debt, focuses on resource mobilisation: CM

He said the Union government has imposed a ceiling on new proposals for external assistance through external aided agencies from Himachal Pradesh

China assures Lanka of 'steadfast support' on its road to economic recovery

China's Vice Minister of Foreign Affairs Sun Weidong has assured Sri Lankan President Ranil Wickremesinghe of steadfast support to overcome the unprecedented economic crisis the island nation is going through. Weidong met President Wickremesinghe on Tuesday and expressed keen interest in exploring opportunities to strengthen the bilateral relations while reiterating China's steadfast support for Sri Lanka in its ongoing economic recovery, an official statement on Wednesday said. Sri Lanka is in talks with China along with other bilateral creditors to negotiate debt restructuring as part of an IMF-backed plan to reduce and manage the island nation's debt. The crisis-hit country owes USD 7.1 billion to bilateral creditors, with USD 3 billion owed to China. As President Wickremesinghe expressed his sincere appreciation for the unwavering assistance provided by China during this critical period, it highlights China's dedication to fostering closer ties with Sri Lanka on various fronts,

General govt deficit moderated to 9.4% of GDP in 2022-23, says RBI report

The general government deficit and debt moderated to 9.4% and 86.5% of GDP, respectively, in 2022-23 from peak levels of 13.1% and 89.4% in 2020-21 respectively, says RBI

Why Anil Agarwal-owned Vedanta group companies face high debt risk

Borrowings to pay record dividends to shareholders, including to the London-based holding company, have touched new highs

Yield-to-maturity in debt mutual funds continue to trend downwards

Wrong end of the curve: YTM of most scheme categories 15-65 bps lower at the end of April

Emerging US debt deal would raise limit, cap spending for two years

Under the terms of the emerging agreement, defense spending would be permitted to rise 3% next year in line with President Joe Biden's budget request

Reliance Power offers Rs 1,200 cr to settle debt of Butibori power project

Reliance Power has made a Rs 1,200 crore one-time settlement (OTS) proposal to the lenders of its subsidiary Vidarbha Industries Power Ltd (VIPL) to settle its debt, sources aware of the matter said. As per the proposal, the company has offered to pay around Rs 1,200 crore in upfront cash to the lenders which include Axis Bank, SBI, Bank of Baroda, PNB, Canara Bank, and Bank of Maharashtra. The outstanding loan of the company as on March 31, 2022, is around Rs 2,200 crore. According to sources, Reliance Power's OTS offer is supported by Varde Partners of Singapore, which is already an investor in another group company, Reliance Infrastructure Ltd. VIPL operates a coal-based project with a capacity of 600 MW (2x300 MW) at the Butibori Industrial Area in Nagpur, Maharashtra. Prior to this, Ahmedabad-based CFM Asset Reconstruction Pvt Ltd had made an all-cash offer of Rs 1,120 crore to the lenders of VIPL. CFM ARC is now under the scanner of RBI and the Income Tax Department for all