BackSBI raises $500 million from dollar bond issue
SBI, whose 5-year bond issuance is coming after a gap of nearly a year, received bids worth $2.9 billion
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New Delhi: State Bank of India (SBI) tapped the dollar bond market after a gap of nearly a year with a five-year issuance that raised $500 million on Tuesday.
The bank received bids worth $2.9 billion, according to a senior SBI official. The bond was priced at 145 basis points above the 5-year US Treasury, which is around 3.29%.
This is the first dollar bond issuance by a domestic bank in 2017. State-owned Bharat Petroleum Corp. Ltd’s Singapore unit issued $600 million of 10-year dollar bonds, Adani Ports & Special Economic Zone Ltd sold $500 million worth bonds earlier this year.
Rating agency Fitch Ltd has given a rating of BBB- for SBI’s issuance. According to Fitch, the bank’s core equity Tier 1 ratio is at 10.3% at the end of September. The bank is likely to receive around $835 million in new capital from the government shortly (of the total $1.1 billion earmarked for FY17; around 5% of FY16 equity) and has plans to raise an additional $2.2 billion directly from the market, for which it has received shareholder approvals.
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