SBI in international bond market to raise nearly $500 mn in green bonds

The nation's largest lender State Bank of India Wednesday raised the first tranche of USD 650 million through a maiden green bond offering, which is part of its planned USD 3 billion in such funds for onward lending to green projects.

The five-year dollar money is priced at the US treasury plus 165 basis points, while from for an British investor the coupon will be 3 Libor plus 151 bps.

"SBI has successfully priced our maiden green bonds, a five-year money for USD 650 million at T+ 165 bps, corresponding to 3L + 151 bps approximately," a merchant banking source official said.

The money is raised through the bank's London branch, the source added.

With this issue SBI will become compliant with the global standards as prescribed by the Climate Bonds Initiative, a global not-for-profit investor-focused organisation.

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Moody's upgrade: CEA Arvind Subramanian hopes other agencies follow suit

Top government officials today hailed the rating upgrade by Moody's as "long overdue" and hoped others such as S&P and Fitch will follow suit as it presses ahead with steps to ratchet up growth.

The US-based Moody's today upgraded India's sovereign rating after 13 years to Baa2 with a stable outlook, from Baa3 earlier.

"It's a welcome development, but we also feel it was long overdue... it's a recognition of the actions that the government has undertaken like GST, bankruptcy. We also need to keep all these things in perspective," Chief Economic Adviser Arvind Subramanian said.

The government, he said, "is going to do what it has to do on the domestic front -- employment growth, economic growth, reviving investment," he told reporters here.

Asked if he expects other agencies like S&P and Fitch to upgrade, he said: "Let's hope they are not inconsistent amongst each other."

Subramanian had earlier observed that rating agencies follow inconsistent policies while rating India and China.

Economic Affairs Secretary Subhash Chandra Garg said the upgrade is definitely a big vindication of the structural and institutional reforms that India is doing.

"The fiscal deficit consolidation, debt control and all so everything which the government has done in the past couple of years have been recognised. They are projecting a little rise in the trajectory going forward, so they are conscious of the real dynamics of the debt situation. We, of course, remain committed to the fiscal path," Garg said.

Unharmed by demonetisation, real estate sector to bounce back in 2017

Latest Business News - After demonetisation, the fillip given to the affordable housing sector, coupled with remonetisation which is again bringing cash, as well as the hope of lower interest rates, would all help the sector see returns.

According to experts, there is a high possibility of prices softening in sub-markets or precincts away from city centres and which have seen a lot of housing supply in recent years. For example, in the Mumbai metropolitan region, precincts such as Vasai-Virar, Palghar, Kalyan-Dombivli, Shilphata and upcoming locations around Panvel have a lot of supply.

“Tier-II and III cities, especially those driven by business communities, such as Jaipur, Surat, Indore, etc, will see a higher impact of demonetisation and easing in land prices in the medium to long term. Certain projects in Kolkata’s northern sub-market might witness price reduction in the next three-four quarters. Vacant land in the north of Kolkata would see easing of prices in the next one year,” said JLL India recently.

Though rating company Fitch has said property developers' sales would come down by 20-30% in 2017, and their leverage positions go up, many believe home sales are bouncing back. These were at a near-standstill in November as as people stood in queues to deposit old notes and withdraw money. The secondary property market and luxury home market were hit hardest, as the cash component was high in these segments.(Read more)