Base Rate ...Aha !
It will make the job a lot easier, not mine but of everyone in the industry and markets, particulary of the analysts. BPLR was opaque to say the least and even coming close of ascertaining it for a valuatuon purpose gave me goosebumps. Base plus a spread is good for valuation, peer comparison, scenario and simulation analysis, it sounds good practically for everything. Party time for high credit rating entities and junkies will atleast get to know how much credit enhancement they need to get low spreads.
Increased integration with the global practices will follow and alas foreign investors will feel less foreign when discounting their cash flows for valuuation purposes. Long live the Base Rate, may BPLR rest in peace.
1 comment:
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