RBI allows FIIs to invest in credit enhanced bonds

Last Updated: Mon, Nov 11, 2013 14:56 hrs

MUMBAI (Reuters) - The Reserve Bank of India (RBI) said it would allow foreign institutional investors (FIIs) to invest up to $5 billion in credit-enhanced bonds issued locally by Indian companies.

Credit-enhanced bonds are debt instruments that can be issued by lower-rated companies to improve the credit profile of their debt issuances.

Earlier this year, the RBI allowed non-resident entities to provide credit enhancement to Indian companies.

In a circular issued late on Monday, the central bank said the $5 billion limit would be part of the overall $51 billion quota for corporate debt investment by FIIs.

(Reporting by Himank Sharma and Suvashree Dey Choudhury; Editing by Kevin Liffey)

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