The Reserve Bank of India on Thursday allowed foreign investors to buy default non-convertible debentures and bonds – a move which is seen to deepen the bond market.
Bond issuers will need to restructure the bond to comply with the minimum maturity tenure, as foreigners are not allowed to buy corporate bonds of below three years. “It has been decided to permit foreign portfolio investors to acquire NCDs/bonds, which are under default, either fully or partly…The revised maturity period of such NCDs/bonds, restructured based on negotiations with the issuing Indian company, should be three years or more,” RBI said. — Special Correspondent
