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- Title
Credit Enhancement : An Enabler for Secondary Market Development of Infrastructure Finance in India.
- Authors
JAISHANKAR, P. RAJA; TRIPATHI, GIREESH CHANDRA; SHARMA, MEGHNA
- Abstract
Quantum of investments needed for Indian infrastructure are huge. Credit Enhancement (CE) strengthens the lower rated bonds by bringing in some safety features and helps increase in the bond market activities. This paper examines various ways of Credit Enhancement, their usefulness, especially for infrastructure projects. A few cases, Indian as well as international, have been discussed which highlight the benefits of CE as a potential tool to augment cost effective long term fixed resources from bond market. One common finding is that this process, beneficial to almost all the stakeholders, certainly reduces financial cost and elongates the repayment period. This paper primarily deals with External Credit Enhancement offered by third party enhancers which include Letter of Credit and Wrapped Securities that have been found to be the best tools.
- Subjects
INDIA; BONDS (Finance); SECONDARY markets; INFRASTRUCTURE (Economics); BOND market; LETTERS of credit; FINANCIAL instruments
- Publication
Finance India, 2023, Vol 37, Issue 1, p39
- ISSN
0970-3772
- Publication type
Article