Foreign investors lap up SBI dollar bonds

Mumbai, July 26: The country’s largest lender, State Bank of India (SBI), has raised $1.25 billion from investors abroad at 4.125 per cent, for five years. This was the second largest single tranche bond sale that garnered overwhelming response, despite recent concerns expressed by international credit rating agencies on the country’s economy.

SBI’s dollar-denominated bonds were subscribed 5.4 times. They got $6.8 billion from around 350 accounts spread over Asian, European and US investors. The lead managers to the issue were Deutsche Bank, Citibank, Barclays, Bank of America Merrill Lynch, JP Morgan and UBS.

In 2010, SBI had raised $1 billion for five years at 4.5 per cent.

“This issuance has certainly provided a window of opportunity to other high-quality Indian issuers to tap the international bond markets,” said Rajiv Nayar, head of capital markets origination at Citi India. He said the SBI notes were priced at the lowest ever coupon...

SBI raises $1.25 b from overseas bond sale

New Delhi, July 26:  State Bank of India raised $1.25 billion from an overseas-dollar-denominated bond sale on Thursday. This is the largest single-tranche offering by a public sector bank from India.

The bank’s London branch issued 4.125 per cent five-year-notes due in July 2017 at 375 basis points, spread over five-year US Treasuries. The notes offer the lowest ever coupon achieved for an Indian issuer in the US dollar bond market in the five-year tenure, said a banker close to the development. The notes, a debt instrument, are rated Baa2 by Moody’s and BBB- by Standard & Poor’s.

This is also the first public sector bank US dollar bond issuance out of India since May 2011. The last dollar-denominated bond offering by an Indian company was in February when Axis Bank raised $500 million (in the form of five-year medium-term notes) at 440 basis points spread over five-year Treasuries. SBI had hired six global giants — Citigroup, Barclays, Bank of...