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SBI’s retail bond issue 17.3 times subscribed: sources

SBI’s retail bond issue 17.3 times subscribed: sources

Mumbai: State Bank of India’s public bond issue was subscribed 17.3 times and the country’s biggest lender intends to close the issue on Wednesday versus earlier scheduled 25 October, three sources with direct knowledge told Reuters on Tuesday. “These are provisional numbers. We are still counting. The response was very good. So, we intend to close it on 20 October. But decision has not yet been taken, we have to give notice to investors," said one source.

The country’s largest bank began selling lower Tier II bonds on Monday worth Rs1,000 crore, including Rs500 crore greenshoe through a public issue.

Bids by high net worth individuals were at 18 times their alloted amount, while institutional buyers applied for more than 46 times their allotment, the sources said.

Retail investors bid for twice the amount of bonds allotted to them, they added.

The bank has earmarked 50% of its public bond issue for retail investors, 25% for high net worth individuals and another 25% for qualified institutional buyers.

The state-run bank has issued two series of Lower Tier II bonds--10-year and 15-year. The 10-year bonds have a call option after 5-year and the 15-year papers have a call option after 10-year, the offer document shows.

The bank will pay a coupon of 9.25% per annum on the 10-year bond if call option is exercised and 9.445% if the bank doesn’t call back its bonds after 5-year.

On the 15-year bond, the bank will pay a coupon of 9.50% if call option is exercised after 10-year and 9.598% if the option is not used.

The lead managers of the issue are Citigroup Global Markets India, Kotak Mahindra Capital, and SBI Capital Markets.

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