In January 2006, Reserve Bank of India had permitted banks to raise hybrid capital (Tier I and Upper Tier II) in Indian reupees. Subsequently, on July 21, 2006 the banks were permitted to raise this capital in foreign currency too. UTI bank, which had already established its MTN programme and had the upper Tier II structure built in the programme, was the first off the block to go ahead with the raising of this capital.

Transaction Details:

• Amount : $150 million
• Security : 15NC1O Upper Tier II Subordinated debt
• Security Ratings : Baa3 (Moody''s) / BB- (S&P)
• Maturity Date : Aug 12, 2021
• Call Date: Aug 12, 2016
• Coupon : 7.25Opct
• Yield : 7.273pct or T+ 231.5 bps
• Step-Up : If Securities not redeemed after 10Y, coupon steps to +331.5 bps over then current 5Y UST
• Trade Date : Aug 04, 2006
• Settlement Date : Aug 11, 2006
• Books : USD1BN
• No. of Investors : 70
• Geographical Split
  Asia : 54 per cent Europe : 42 per cent Offshore US : 4 per cent
• Type of Investors
  Banks : 20 per cent Funds : 68 per cent Retail: 12 per cent.

• First international Upper Tier II subordinated debt out of India
• First international debt offering by the Bank
• First Indian Bank to issue Bank Capital instruments off an EMTN programme
• Pioneered market for regulatory capital for all other Indian banks to follow
• Reopened Asian Bank Capital Market post recent market volatility
• Priced with a fixed rate coupon of 7.25 per cent, equivalent to a spread of 231.5 basis points (bps) over the 10-year US Treasury (UST), or a yield of 7.273 per cent.
• Transaction priced at 7.25 per cent or UST+231.5 bps (equivalent to around L+170 bps to asset swapped investors) versus initial guidance of mid-swaps + 175 to 200 bps, reflecting very strong investor demand.
• Highly successful 3-day road show in HK, Singapore and London. High 1-on-1 meeting conversion ratio, reflecting quality of management presentation, strong credit of the Bank, and overall investor demand for Indian subordinated paper
• Total order book approaching $1 billion, reflecting a massive 6 times over subscription
• Largest book for Indian transaction in recent times.
• Joint lead managers were Barclays Capital, Citigroup and Deutsche Bank