New Delhi: State Bank of India is tapping the dollar bond market with a five-year issuance, after a gap of nearly a year. The bank, which was looking to mop up around $700 million, has received bids worth $1.2 billion, according to a senior SBI official.
Though pricing is yet to be determined, Bloomberg reported that the bank is looking to price the bond at 170 basis points above 10-year US Treasury.
This is the first dollar bond issuance by a domestic bank in 2017. State-owned Bharat Petroleum Corp. Ltd’s Singapore unit issued $600 million of 10-year dollar bonds, Adani Ports & Special Economic Zone Ltd sold $500 million worth bonds earlier this year.
Rating agency Fitch Ltd has given a rating of BBB- for SBI’s issuance. According to Fitch, the bank’s core equity Tier 1 ratio is at 10.3% at the end of September. The bank is likely to receive around $835 million in new capital from the government shortly (of the total $1.1 billion earmarked for FY17; around 5% of FY16 equity) and has plans to raise an additional $2.2 billion directly from the market, for which it has received shareholder approvals.