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(Photo: Mint)
(Photo: Mint)

SBI raises $600 mn through offshore bonds

  • The five and half year duration bonds raised by SBI’s London branch were priced at a coupon of 1.8%
  • The bond sale witnessed demand of over $2 billion

Mumbai: India’s largest lender on Wednesday raised $600 million through offshore bonds.

The five and half year duration bonds raised by SBI’s London branch were priced at a coupon of 1.8%.

“This is the lowest ever coupon of 1.8% for a US dollar bond from an Indian credit. Mid 2019 the five-year treasury was at around 1.8%; SBI all in pricing today is at the same level, which shows the strength on SBI and India credit," said a person aware of the details of the bond placement.

The bond sale witnessed demand of over $2 billion, the person added.

Investment banks Bank of America, Standard Chartered Bank, SBI Caps and others advised SBI on the bond offering.

S&P Global Ratings on Wednesday had assigned a 'BBB-' long-term issue rating to these senior unsecured notes by State Bank of India to be issued under the bank's $10 billion medium-term note program.

On the ther hand, Fitch rating too has assigned a 'BBB-(EXP)' expected rating to State Bank of India’s proposed senior unsecured notes. The final rating is subject to the receipt of final documentation conforming to information already received, it said.

The senior unsecured instruments are rated at the same level as the bank's Issuer Default Rating (IDR), in accordance with Fitch's criteria.

The rating reflects Fitch's expectation of a very high probability of extraordinary support from the Indian sovereign (BBB-/Negative), if required, in light of the bank's very high systemic importance, quasi-sovereign status, and much broader policy role than its state-owned peers, which was demonstrated in the SBI-led rescue of Yes Bank in March 2020.

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