SBI bond sale raises $1.25 bn
27 July 2012
The State Bank of India (SBI), the country's largest lender said that it has raised $1.25 billion (approximately 6,900 crore) yesterday through overseas sale of 5-year bonds at a coupon rate of 4.125 per cent.
The bonds have a spread of 375 basis points over comparable 5-year US treasury notes, and the offer rate is the lowest ever achieved by an Indian entity in the US dollar bond market for the 5-year category.
The bond issue, the first international endeavour by an Indian company in five months, was managed through the lender's London branch. Global banking majors Citibank, Deutsche Bank AG, Bank of America Corp, Barclays Plc, JPMorgan Chase and Co and UBS AG acted as lead managers to the bond issue.
According to market information, the issue received overwhelming response from investors despite the downgrading of India's credit outlook to 'negative' from 'stable' by two global credit rating agencies in April and June.
The SBI bond issue was oversubscribed over five times, receiving bids worth $6.8 billion from around 350 global investors including investment funds, banks, insurance companies and public companies among others.
Maximum bids were from Asia with 47 per cent, followed by the US with 31 per cent and Europe accounting for 22 per cent, according to unconfirmed reports.