State Bank of India (SBI) has raised $750 million by issuing 5-year bonds. These bonds are known as Regulation S bonds and were issued at an interest rate of 4.875%. This means that SBI will pay investors 4.875% per year for the next 5 years for borrowing this money.
The bonds are benchmarked against 5-year US treasury bonds, which means that their interest rate is set in relation to the interest rate paid on similar US government bonds. SBI’s bonds were priced at a spread of 145 basis points over the benchmark, which means that the interest rate on the bonds is higher than that paid on US treasury bonds.
According to SBI Chairman Dinesh Khara, the bank has a strong base of investors in offshore capital markets. This allowed it to raise funds effectively from leading fixed income investors from all over the world, especially in times of high volatility and uncertainty.
The issuance of these bonds was met with strong demand from investors worldwide, with a final order book of over $2.9 billion across 181 accounts. Due to this demand, the order book grew to $5.4 billion, which allowed SBI to revise its guidance from T+185 area to T+145.
These bonds were issued under SBI’s MTN (medium-term note) program and will be listed on the Singapore SGX and the India INX in Gift City.