Sir these are state govt. Guaranteed bonds than why there rating is A
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By yield you should understand that these bonds carry risk, because govt treasury 10 year bond is quoted close 5.4-5.7%, so first of all if these bonds are backed by the govt, they are not backed by central govt, instead of state govt which can default it does not have power to print the money and pay the debt. So they are not risk free,
But state govt gurantee is of no use if they gurantee and default
Yeah guarantee provides a sense of assurance but we always needs to see reputation of guarantor and willing and ability to pay back in case the company defaults. Ofcourse it of use that is why it’s A rated otherwise it would have rated lower. So if when company defaults and govt is also suffering from crisis of its own there are high chances that govt doesn’t fulfils its promises.