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| IDBI Bank to raise $500 mn from overseas bonds |
| Bs Reporter / Mumbai Jul 30, 2010, 00:36 IST |
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IDBI Bank Ltd was seeking to raise $500 million selling bonds overseas, said officials, who declined to be identified as regulations don’t permit them to speak to the media until the sale is concluded.
The funds thus raised would be used to augment lending, the official said.
The bond sale by IDBI follows a similar sale by the nation’s biggest lender, the State Bank of India (SBI), on July 23. SBI raised $1 billion in bonds sold to global investors, offering a coupon of 4.5 per cent per annum.
Other banks that have sold bonds overseas over the past few months include ICICI Bank and Bank of India, for $500 million each, besides Bank of Baroda and Axis Bank ($350 million). State Bank of India’s sale were subscribed 4.8 times and saw demand from over 350 investors.
 IDBI might have to pay a coupon higher than SBI as the biggest lender had a higher rating and also because IDBI’s bonds would have a maturity slightly longer than SBI bonds, the official said. IDBI officials declined to comment.
SBI bonds are rated 'Baa2’/Stable by Moody’s and 'BBB-‘/Stable by Standard & Poor’s. IDBI’s foreign currency debt is rated BBB- by Standard & Poor’s and Baa3 by Moody’s Investor Service, the lowest on investment grade.
Bloomberg earlier on Thursday reported that the bank’s dollar denominated bonds maturing in five-and-a-half years may have to offer 310 basis points more than the Treasuries.
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