SBI Raises $600 Million from Bonds to Support Foreign Business Expansion

State Bank has announced that it has decided the issuance of $600 million which is about Rs 4,500 crore from bonds to back the expansion of the overseas business.However, the fund raised through senior unsecured fixed-rate notes having a maturity period of 5.50 years and coupon of 1.80 percent payable semi-annually under Regulation-S, states the bank in regulatory filling.

The bank further adds, "The bonds will be issued through our London branch as of January 13, 2021, and shall be listed on Singapore Stock Exchange and India International Exchange, GIFT City."

The bonds will be listed on SGX-ST and India INX. The issuance represented SBI’s return to the international public bond markets after a gap of close to 2 years.

In a statement, SBI says, "India’s largest commercial bank, State Bank of India, acting through its London branch, raised today USD 600 Million of “Regulation S” bonds at a coupon rate of 1.80 percent. The bond is benchmarked against the 5year US Treasury and priced at a spread of 140 bps over the benchmark)."

The transaction was well received and saw strong interest from investors across geographies with a final order book over USD 1.9 billion. The Notes are expected to carry a final rating of Baa3, BBB- and BBB- from Moody’s, Standard and Poors and Fitch respectively.

Commenting on the transaction, Venkat Nageswar (Deputy Managing Director – International Banking Group) states, “The successful issuance demonstrates the strong investor base SBI has created for itself in offshore capital markets allowing it to efficiently raise funds from the World’s leading fixed income investors, even during periods of heightened volatility. This is an indication of confidence global investors have in the Indian banking sector generally, and in SBI in particular and is also a testament to the exceptional access that SBI enjoys in the global capital markets.”