SBI seeking to raise Rs22,500 cr through dollar bonds: report
24 Mar 2011
The State Bank of India, the country's largest lender, is considering raising as much as Rs22,500 crore by issuing dollar bonds to fund high-value loans to Indian firms having international operations, according to a report in morning business tabloid Mint.
The money will be raised through multiple tranches over the next one year, the newspaper said. Citing two unnamed sources, it added that the bank's board was expected to approve the proposal shortly.
According to the report, SBI may go for fresh fund-raising as an extension of its existing medium-term notes (MTN) programme, either in the US or European markets. The lender had first launched an MTN programme in 2004 and has so far raised $3.9 billion.
As the original board approval was for $5 billion, it can still raise $1.1 billion under the existing MTN programme. This means the bank can raise as much as $6.1 billion from the overseas market.
''The process is on to raise $3-5 billion from a fresh MTN in overseas markets, which will be used to give loans to Indian companies, once we exhaust the remaining $1.1 billion headroom from the current programme,'' one of the officials was quoted as saying.
''The demand for loans from companies is huge. Even if we raise $5 billion, this may not even last for a year,'' the official added.
