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SBI to decide on further fund raising under MTN

SBI to decide on further fund raising under MTN
PTI
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First Published: Sun, Jan 03 2010. 12 28 PM IST
Updated: Sun, Jan 03 2010. 12 28 PM IST
Mumbai: The State Bank, which has raised $2.9 billion so far under its $5 billion medium-term notes programme, is likely to decide on raising the remaining part in the second quarter of next financial year.
The lender, which started raising money under the $5 billion medium-term notes (MTN) programme in 2004 to finance its overseas expansion plans, said the bank is unlikely to tap the MTN route to raise funds till June this year.
“At the earliest, we would look at raising further money under the MTN programme by July 2010. The details of this exercise will be decided according to the prevailing market conditions and bank’s requirements,” the official said.
Under the programme, SBI has raised around $2.9 billion in various phases, which has left the banking major with a headroom of $2.1 billion to raise further funds through this route.
In October this year, SBI raised $750 million (about Rs3,600 crore) issuing bonds, which carried a maturity of five years at a coupon rate of 4.5%.
It raised an additional $100 million senior debt via the issue of fixed rate bonds last month, which carried a maturity period till 2014 and a coupon of 4.50%.
An MTN programme allows an issuer to raise funds on an ongoing basis through various products such as floating rate notes or on a fixed rate after obtaining prior regulatory and other approvals.
The amount raised through the MTN programme will be primarily used to fund the expansion plans of SBI’s foreign branches and to expand its overseas loan book, the official said.
After SBI’s October issue, its nearest competitor, ICICI Bank had also raised $750 million late last year through the issue of five-year bonds at its Bahrain branch.
The issue, which had an order book of over $3 billion, was participated by over 250 investors and carried a coupon rate of 5.5%.
SBI, which derives around 12% of its total revenue from the overseas business, at present has 137 branches abroad.
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First Published: Sun, Jan 03 2010. 12 28 PM IST
More Topics: SBI | Banking | MTN | Medium-term notes | Funds |