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In April alone, the extra yield investors demand to own dollar-denominated junk bonds from emerging markets over Treasuries widened 37 basis points to 634 basis points. Meanwhile, credit-default swaps - a type of protection against defaults - saw limited deterioration, with a broad index trading far below levels seen ahead of the last wave of debt meltdowns in 2022-2023.
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In its petition, IIFL said ACRE arbitrarily suspended and eventually terminated recovery operations, disrupting momentum and continuing to levy fees in violation of RBI guidelines. The finance firm also said ACRE misused trust funds to cover its legal expenses in arbitration proceedings-costs that were explicitly disallowed under the transaction documents.
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At least half a dozen large private and MNC banks, following a rigid interpretation of the law, have told such offshore investors that they can hold less than 10% in listed companies only after registering themselves as foreign portfolio investors (FPI) with the Securities & Exchange Board of India (Sebi).
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