Rupee ends higher
Mumbai: The rupee finished at 46.00/02 to a dollar on Wednesday. It had closed at 46.1050/1150 against the dollar on Tuesday.

Forwards Market: The six-month forward closed lower at 2.04 per cent (2.30 per cent) while the twelve-month forward closed at 1.75 per cent (1.90 per cent).

G-Secs: The 10-year benchmark 7.37 per cent 2014 paper closed at a yield of 6.22 per cent at a price of Rs108.20, 15 paise lower than the previous close. The 7.38 per cent 2015 paper ended lower at 6.25 per cent at a price of Rs108.95.

Call Rates: Rates went up to 4.75 per cent during the day before easing to 4.25-4.50 per cent towards close.

CBLO market: 125 trades worth Rs 3,766.75 crore were transacted in the rate range of 4.90 to 1.00 per cent.

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CRISIL upgrade for SAIL bonds
Mumbai: Crisil has upgraded SAIL's non-convertible bonds and fixed deposit programmes to A and FA+ from BBB and FA respectively.

It also reaffirmed ratings on Tata Steel's non-convertible debentures, fixed deposits and commercial paper programmes. Crisil believes the current steel prices will sustain over the short to medium term.
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Stressed Asset Fund to be a Financial Institution - IDBI becomes a bank from Oct.1
Mumbai: The Government has accorded the status of a financial institution to the Stressed Assets Stabilisation Fund (SASF), a Rs.9,000-crore special purpose vehicle that is taking over the non-performing assets of Industrial Development Bank of India.

In a letter to IDBI, the Government has said it has given SASF an institutional status to help it recover dues from defaulters. The institution has moved the Debt Recovery Tribunals or courts in many cases and with this move the Government has given the authority to the SASF to recover dues on its own right. A gazette notification is awaited.

IDBI has also received a communication from the Government declaring the appointed date for its conversion into a commercial bank as of October 1.
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Govt. issues bonds for Rs.9,000 crore for the Stressed Assets fund
New Delhi: The Government on Wednesday issued special securities for Rs.9,000 crore towards the creation of the ‘Stressed Assets Stabilisation Fund (SASF)' to help Industrial Development Bank of India tackle its problem of stressed assets.

The amount will be invested in non-interest bearing special securities of 20-year maturity with a call option. The transaction is budget neutral for the Government, a Finance Ministry release said.

The amount realised by SASF on the recovery of dues will be paid to the Government annually. The Government will redeem bonds of an equivalent amount, thus leaving IDBI with an equivalent amount of cash. There will be no net out-go from the Government on account of the transaction.

With the cleaning up of IDBI's books, the net NPA position of IDBI is expected to improve, leading to better credit rating and consequent ability to access lower cost funds in the domestic and foreign markets to enable IDBI to compete aggressively for business.
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Tata Motors and Leyland upgraded
Mumbai: Crisil has upgraded the ratings of Tata Motors and Ashok Leyland.

The rating agency said the rating upgrade is driven by significant improvement in Tata Motors Ltd's financial risk profile, which it is expected to sustain in the medium term. This improvement is aided by the stronger-than-expected performance of the commercial vehicle (CV) industry in 2004-05 and 2005-06 and the company's successful placement of its $400 million foreign currency convertible bond (FCCB) issue.

Crisil has also upgraded the rating on Ashok Leyland Limited's non-convertible debenture programme because of the significant improvement in its financial risk profile, which it is likely to sustain over the next few years.

The company's foreign currency convertible bond (FCCB) issue of $100 million significantly enhances Ashok Leyland's financial flexibility as it provides it with extremely low-cost funds, which it can use to fund its capital expenditure plans and acquisitions, if any.
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