Trading in UTI bonds soars

MUMBAI: For debt market dealers, it is a clean bargain and in the past one month over Rs 1,000 crore trading volumes have been reported on this counter.
UTI bonds (not the US-64 bonds) with three different coupons have hit the market in the past one month, which have been issued by the government to UTI to meet the shortfall in its assured return schemes.
On Friday, over Rs 100 crore worth trading volumes have been reported with domestic mutual funds and corporates buying into these special securities, said debt market dealers.
Explains a private sector fund manager, "We have taken substantial positions on UTI bonds since it is trading at a spread of over 30 basis points above the government securities of similar maturity (UTI bonds are maturing in 2010). Moreover, corporate spreads, especially of highly-rated corporates have shrunk substantially over the past two months to around 40 basis points."