(Bloomberg) -- As India’s shadow banks continue to feel the sting from a cash crunch, a handful of the safest ones are actually finding a bit of respite as their overseas borrowing costs decline.
The industry has been reeling from a crisis triggered by the shock collapse of financier IL&FS Group last year, which has been followed by more failures.
But yield-starved international investors are increasingly lending to the strongest financiers, betting government steps to shore up the industry will staunch broader contagion. The government needs a healthier shadow banking sector as it tries to boost the slowest economic growth in six years.
Average coupons on foreign-currency bonds of shadow banks fell to 4.66% in 2019, from a record high of 5.32% in 2018.
Accessing the offshore debt markets will help the lenders as they try to meet rupee and overseas bond redemptions that are set to jump to an all-time high of $60 billion next year.
A record $4.5 billion equivalent of offshore bonds was sold by six non-bank financial companies year-to-date, compared with $1.8 billion overall in 2018.
REC Ltd. is marketing dollar bonds, a person familiar with the matter said. Another lender, Manappuram Finance Ltd., started a roadshow last week for dollar notes.
(Updates with more detail in last paragraph.)
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