Indian money managers are dumping corporate bonds as they struggle to meet redemptions after the biggest-ever forced closure of funds in the country last month.
Even higher-rated debt is under pressure. Notes issued by government-backed lenders Punjab National Bank, Andhra Bank and Canara Bank were traded in the past few days at the highest yields in over a year of at least 12.5%, data published on National Stock Exchange website show.
Mutual funds struggling with redemptions were among the sellers, people familiar with the matter said. The Reserve Bank of India took steps to inject more liquidity into the fund industry through bank loans after Franklin Templeton shocked markets by shutting six debt funds last month.