ICICI Bk raises $ 2 billion in five-year unsecured bonds

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ICICI Bank has raised USD 2 billion in five-year senior unsecured bonds. The bonds were priced at 99.916 to pay a yield of 6.645%. That was equal to a spread of 237.5 basis points over comparable US treasuries. The bond, which matures in Oct 2012, pays a coupon of 6.625%.

This USD 2 billion bond issue is the first big primary bond issue which was seen in Asia after the subprime crisis hit 2 months ago. Some dealers are also calling this deal path breaking because of its size and also the kind of attraction it has seen from investors. It attracted nearly USD 6 billion in demand from 214 investors. If you look at this issue, sources inform that the investors were 45% from the US whereas 38% were Asian and 17% were European. Also all the types of fund managers, pension funds, retail investors participated in this bond issue.

The pricing also seems to be in line with market expectations. The bond has been trading between 225 and 230 basis points over similar US treasuries. Dealers feel that the pricing is  in line with market expectations. The issue did carry a premium of nearly 30 basis points, and this is because after the financial market turbulence that we was seen in the recent past, ICICI would have to pay a little more for the kind of debt it is raising and USD 2 billion is not a small amount. It has also been forecasting that the bank will have to pay a little more, so another USD 2 billion in ICICI's kitty in a path breaking game.