tag:blogger.com,1999:blog-19649274.post6506671668889068764..comments2024-03-27T17:16:12.789+05:30Comments on The Leap Blog: Milestone in the internationalisation of the INRAjay Shahhttp://www.blogger.com/profile/03835842741008200034noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-19649274.post-24291244584602028642007-04-17T23:32:00.000+05:302007-04-17T23:32:00.000+05:30You are a firm outside India. You issue a bond whi...You are a firm outside India. You issue a bond which promises to pay Rs.1 billion on a future date. Today, you have some proceeds from the sale of bonds) which are instantly converted into USD (so it doesn't matter in what currency you are paid). You face a conversion risk since at a future date, you have to pay the bondholder Rs.1 billion. So you go to the NDF market and agree to a locked-in price for conversion of USD to INR at a future date. This involves a certain interest cost. The difference between the two (the interest rate on your bond and the interest rate on the NDF) is your INR financing cost for an offshore issue.<BR/><BR/>Can someone make this more concrete using current numbers on the NDF market?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-1120769768489573182007-03-15T08:45:00.000+05:302007-03-15T08:45:00.000+05:30Just a follow through of earlier comment. how woul...Just a follow through of earlier comment. how would the issuer hedge himself. is it through NDS if so can u just explain with an example pl.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-80605800537505083232007-03-14T16:41:00.000+05:302007-03-14T16:41:00.000+05:30How is the issuer generating the 7.25% coupon is h...How is the issuer generating the 7.25% coupon is he doing so by parking the funds with a registered fii and therafter the he fii parking the funds in Indian paper within the limits available with it??? The curency risk is with the investor and with the INR appreciating agaisnt the investor currency it is the investor who gains.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-19649274.post-40069880595543815022007-03-14T13:55:00.000+05:302007-03-14T13:55:00.000+05:30hOW CAN ANYONE ISSUE A RUPEE DENOMINATED DEBT PAPE...hOW CAN ANYONE ISSUE A RUPEE DENOMINATED DEBT PAPER IN OVERSEAS MARKET. eSPECIALLY BY PRICING AT 7.25% COUPON WHICH IS AN INDIAN INTEREST RATEAnonymousnoreply@blogger.com