India Funds Hunt for Spreads, Liquidity as Credit Woes Mount.

(Bloomberg) -- The massive gyrations in the global bond markets and the ongoing credit crisis in India are forcing money managers to seek liquidity in government bonds even as they eye top-rated corporate paper trading at high spreads to the sovereigns. The spread of three-year AAA-corporate paper over a similar tenor government bond stood at 106 basis points on Thursday after widening to 109 basis points a day earlier, the highest since October, Bloomberg data showed. Following are recommendations from some key asset managers: Tata Asset Management Bullish on the 6- and 13-year segment of the sovereign yield curve due to the spread available over respective benchmarks AAA state-companies' bonds are giving a spread of 70 to 100 basis points over govt bonds of different maturities. [Extracted from the article]