SBI successfully sold its five-year senior unsecured bond (REG S)at 255 BPS over the US treasury yielding a coupon of 325 base per annum raising USD one billion through its London branch. The issue was closed late last night, Citigroup said.
However, SBI could not be contacted for comments, though chairman Pratip Chaudhuri had earlier confirmed that the issue was to be closed late last night. At 325 base, this could be the tightest money raised by a domestic corporate in a foreign market. The merchant banker also said the fixed bonds, which were sold to raise USD 1 billion, will be listed on the Singapore Stock Exchange and has a Baa2 rating from Moody's and BBB- by Standard & Poor's.
This is the third bond sale by SBI in the past two years, with the latest being the USD 1.25 billion it had raised in a 10-year issue last July. That issue was the largest-ever from a domestic bank and also the cheapest five year-issue by a domestic issuer. At 3.75 percent over the US treasury bills, the SBI issue was the cheapest-ever by a domestic company till date with the effective coupon rate, payable half-yearly, working out to be just 4.125 percent.
SBI had mopped up another USD 1 billion in July 2010 also. The bank has a board mandate to raise USD 10 billion from overseas over the next few years, and it has a headroom to raise nearly USD 6 billion more, including the current issuance, since it had raised nearly USD 4 billion till last year.
With the SBI issue, so far this year, domestic companies like Reliance Industries, Bharti Airtel, ICICI Bank, HDFC Bank, Exim Bank, PowerGrid, and Tata Communications among others, have raised a whopping USD 7.5 billion, which is 75 percent of what India Inc mopped in the entire previous year.
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