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Weaker non-banks find it tough to raise debt even as moratorium eludes

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MUMBAI: Smaller and weaker non-bank financiers face more difficulty in raising debt compared to their peers with stronger parentage as risk aversion intensifies amid the covid-19 crisis.

The covid-19 pandemic has affected the funding of most non-banking financial companies (NBFCs) with bond spreads over the three-year government securities rising by another 50-70 basis points (bps), against the 250-300 bps existing spread.

Spreads indicate the difference between yield of a particular bond and yield on the government securities (Gsec), with same maturity.

Experts said smaller and weaker non-bank financiers have either not been able to raise money or have had to settle for less at a higher rate.

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