SBI's $500 million bond priced at tightest spread since RBI swap window: Chairman Setty
New Delhi, Aug 13
State Bank of India Chairman Challa Sreenivasulu Setty has said that the state-owned bank's latest overseas bond issue, priced at the tightest spread among Indian public bond issuances since the RBI swap window announcement, reflects strong global investor confidence in India's growth story and SBI's credit quality.
SBI -- acting through its London branch -- has successfully priced $500 million of Regulation S bonds at a coupon rate of 5.25 per cent.
In addition, the bonds were priced at a spread of 88 basis points over the five-year US Treasury benchmark.
The issue received strong demand from global investors, with the order book peaking at $2.46 billion from 145 investors.
SBI had initially provided price guidance at around 120 basis points over the benchmark.
Strong investor demand enabled the bank to revise the guidance to 88 basis points, resulting in price compression of 32 basis points.
"The successful pricing of $500 million, during the ongoing global uncertainties, is a testament to the strong appetite for bonds of SBI and to the diversified investor base the Bank has in offshore capital markets," Setty said.
He said the diversified investor base allowed SBI to efficiently raise funds from leading global fixed-income investors.
Setty said the tight pricing demonstrated the confidence of global investors in India's growth story as well as SBI's credit quality.
"The tight pricing achieved amid the evolving global macro environment has demonstrated containment in the borrowing cost for issuers from India," he said.
Moreover, the bonds have been rated BBB by S&P, BBB- by Fitch and BBB+/Stable by CareEdge Global.
The notes will be listed on the Singapore Exchange, India International Exchange and NSE International Exchange.
— IANS
Reader Comments
Great news for the economy but many ordinary Indians are still facing high inflation and struggling with loan EMIs. I hope these funds translate into better lending rates for the people on the ground, not just profits for the bank. Let's see the real benefits reach the common man.
SBI proving once again why it's the backbone of Indian banking. The 32 bps price compression from initial guidance shows strong investor appetite. This will definitely boost India's standing in international capital markets. Jai Hind! 💪
As someone who follows global banking, this is impressive. SBI's ability to raise funds at 88 bps over US Treasury during volatile times shows how far Indian banks have come. The global investor community sees India's banking fundamentals as much stronger than many other emerging markets.
All well and good, but let's not forget the bureaucratic hurdles and NPAs that still plague public sector banks. This is just one positive step; we need consistent reforms and better risk management. Still, kudos to SBI for this achievement. 👏
Interesting to see India's deepening integration with global financial markets. The participation of 145 investors from around the world shows real confidence in India's economic trajectory. But a wise investor must also watch out for global headwinds like oil prices and US policy rates.
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