Axis Bank to issue foreign currency bonds

A day after Bank of India revived its medium-term note (MTN) issue, private sector lender Axis Bank today announced that it planned to raise $300-500 million through dollar bonds.

The five-and-a-half-year dollar bonds are likely to be priced about 280 basis points (bps) over US treasury bonds of similar maturity, according to sources.

The notes have been rated ‘BBB-’ by Standard & Poor’s (S&P). The outlook on Axis has been revised to ‘stable’ from ‘negative,’ in line with the revision of India’s sovereign rating by S&P last week.

Bank of India announced a similar trade yesterday. According to sources, it has priced its bonds at 245 bps over the US treasury bonds. In February, the public sector bank had withdrawn the offering as spreads tightened on fears that Greece, Portugal and Spain might default on their sovereign debt.

“The proposed senior unsecured notes issue is under Axis’s $ 2-billion medium-term notes programme and will have a tenor of about five years. These notes will be issued through the bank’s Dubai International Financial Centre branch,” S&P said in a ratings release.