Yields on corporate bonds moderated across tenors and rating categories in June, tracking the movement in government securities (G-sec) yields, according to the Reserve Bank of India’s latest monthly bulletin released on Monday.However, spreads over corresponding risk-free rates edged higher during the period.
According to the RBI bulletin, yields on AAA-rated bonds across one-year, three-year and five-year maturities declined between May 29 and June 18, 2026.
The yield on AAA-rated one-year bonds moderated to 7.54% on June 18 from 7.89% on May 29, a decline of 0.35 percentage points. Similarly, yields on AAA-rated three-year and five-year bonds fell by 0.23 percentage points and 0.33 percentage points, respectively, during the period.The yield on AA-rated three-year bonds also eased to 8.29% on June 18 from 8.58% on May 29, a decline of 0.29 percentage points.
The moderation was also visible in lower-rated corporate debt, with BBB-minus three-year bond yields declining to 11.90% on June 18 from 12.19% on May 29, a fall of 0.29 percentage points.While corporate bond yields softened, spreads over corresponding risk-free rates increased marginally across most categories, the bulletin noted.The spread for AAA-rated one-year bonds narrowed by 0.16 percentage points to 1.73%, while spreads for AAA-rated three-year, AAA-rated five-year, AA-rated three-year and BBB-minus three-year bonds widened by 0.16 percentage points, 0.02 percentage points, 0.10 percentage points and 0.10 percentage points, respectively.The RBI said movements in corporate bond yields largely mirrored those of government bonds.G-sec yields, after easing in April, firmed up in May amid stalled negotiations in West Asia.However, yields have since softened following measures announced by the government and the central bank to attract foreign capital, as well as the recent announcement of a peace deal in the region.Meanwhile, fresh corporate bond issuances declined in April 2026 compared with the previous month, the central bank said.
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