mumbai life insurance corporation has come to the rescue of investors saddled with special bonds issued by the government which are failing to find few buyers the special bonds include oil fertiliser and food bonds which were issued by the government to make up for unfunded subsidies the demand for these bonds had collapsed after the government announced that it will borrow much more through the issue of bonds fortunately for investors in these bonds lic has been buying a large chunk of these bonds in the weeks following october when interest rates first started falling activity in these quasigovernment bonds was at its peak it was widely believed that spreads yield in premium over sovereign bonds would shrink in the coming days enabling traders to make some money but with government announcing its plans to sell more bonds activity in the space quickly dried out we are long term investors and have been investing in these quasi government bonds as their yields have been slipping says n mohan raj executive director investment operations at lic the worst affected from the market turmoil were the fertiliser bonds these long dated securities progressively lost value to trade at a yield of 770780 as against an original yield of 7 we simply dumped our holdings in the market to cut losses we understand that lic bought some of the bonds says a official at a private sector bank the total quantum of fertiliser bonds in the system are in the range of rs 20000 crores with lic now estimated to own bonds worth a few thousand crore but bankers say fertiliser companies who were more keen to get cash in lieu of bonds at one point are getting bank loans at decent rates these days so they are now reluctant to sell their bonds at a discount they point outon the oil bonds front lic is second only to rbi in picking up bonds says mr mohan raj rbi had restarted buying oil bonds from three stateowned omcs from november 26 last year buying over rs 10000 crores in the month of december itself oil company officials say a new set of issuance from the government is in the offing the petroleum ministry has asked for another rs 10000 crore worth of bonds for the last three months of this fiscal