SBI raises $1 billion in 5-year bonds

State Bank of India (SBI) has concluded the issue of $1 billion 5-year fixed rate senior unsecured notes at a coupon of 3.27 per cent per annum.

The interest is payable semi-annually, under a standalone bond issue under US Securities Exchange Commission (SEC) regulations.

The bond issue by SBI, the country's largest lender, however, was at a higher than expected price. SBI sold the bonds at 255 basis points (bps) over five-year US treasuries to yield 3.27%, according to a press release issued by the bank.

In contrast, HDFC Bank had raised $500 million at a yield of 3.06 per cent, 21 bps lower than the price SBI has paid.

''In the backdrop of a volatile global environment, the transaction was well executed in the short time window available,'' said Hemant Contractor, SBI's managing director.

The issue was, however, oversubscribed 4.3 times.

The bonds will be issued through its London branch as of 18 April 2013 and will be listed on Singapore Stock Exchange (SGX).

This is SBI's third overseas bond sale after the $1 billion mop-up in 2010 and $1.25 billion issue in July 2012.