The unexpected writedown of some bonds issued by crisis-hit Indian lender Yes Ba...
MUMBAI/HONG KONG - The unexpected writedown of some bonds issued by crisis-hit Indian lender Yes Bank Ltd as part of a state-led rescue is set to raise borrowing costs and make capital-raising tougher for other banks, investors and analysts said.
The Reserve Bank of India said it would work on a revival plan, as part of which bonds classified as Additional Tier 1 capital will be written down “permanently, in full.” “What this incident does is penalize the good names too,” said a fund manager, who holds Yes Bank AT1 bonds, adding some investors are now considering a legal challenge against the central bank’s plan to wipe them out.
IndusInd added it was adequately capitalized and the decision to defer was due to current market conditions. Government-owned State Bank of India , the country’s biggest lender, said on Saturday it would invest funds to buy a 49% stake in Yes Bank as part of the initial phase of a rescue deal.
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