SBI successfully raised $500 million from Overseas Market

SBI has successfully raised USD 500 million dollar denominated bonds from overseas market at competitive coupon rate of 4.5%. This indicates the value proposition of the SBI in the global market.

The fund raise comes at the backdrop of India’s recent rating upgrade by S&P Global Ratings which has recognized India among the best-performing economies, with average real GDP growth of 8.8% from FY22 to FY24, despite significant global trade uncertainties and geopolitical challenges.

Standard & Poor’s has recently upgraded India’s sovereign rating from ‘BBB-’ to ‘BBB’, which improved investor confidence.

SBI bond issuance was benchmarked against the 5 year US Treasury and priced at a spread of 75 bps over the benchmark. The lucrative pricing has demonstrated reduction in the borrowing cost for Indian issuers subsequent to the sovereign ratings upgrade.

The bond issue attracted over $1.1 billion in orders from 85 accounts, though SBI decided to retain the target amount of $500 million. The deal was oversubscribed, reflecting strong demand from investors across Asia, West Asia, and Europe.

The record low price of SBI bond issuance and wide participation by global investors underscore confidence, buoyancy and strong fundamentals of Indian Economy and its constituents.

Chairman CS Setty said the bond is benchmarked against the five-year US treasury and the final price spread came in at 75 bps over the benchmark. The transaction received an overwhelming response and saw strong interest from investors across geographies with a final order book in excess of $ 1.1 billion across 85 accounts. On the back of strong demand with a peak orderbook of $2 billion, the price guidance was revised from T+105 bps area to T+75 bps.

The five-year money, worth $500 million, was raised through the London branch of the bank.

Last November, SBI had raised $500 million through five-year dollar bonds at a yield of 5.13%, which was at a spread of 82 bps over the US Treasury yield with similar maturity.