Scope to Earn Resilient Superior Returns in Indian Bond Market
Study on ‘Defaults in 2016-17 across issuers rated by Four Largest Rating Agencies’ in India:
Careful credit selection in BBB / A rated space can lead to ‘Resilient Superior Returns’
Key Highlights:
- Default rates across the four Largest Rating agencies have shown an ordinal trend and have seen a decline across rating categories for most rating agencies over last one year
- Study of Issuers that defaulted in FY 2017 reveals the following:
- Over 760 issuers defaulted in 2016-17, out of these 17% were originally rated in investment grade; 7% were rated in investment grade immediately prior to default
- More than 50% of the defaulting issuers were originally rated in Investment Grade in Power, Road and Transport sector
