Axis hires five banks for $500-mn bond issue

Axis Bank, India’s fourth-largest lender by market value, has hired five banks to sell $500 million of dollar-denominated bonds, said a person familiar with the matter.

Bank of America Merrill Lynch, Citigroup Inc, Deutsche Bank AG, JPMorgan Chase & Co and Royal Bank of Scotland (RBS) will help the Mumbai-based Axis sell notes with maturities of as much as 5 1/2 years, the source said on condition of anonymity..

“Axis is looking at expanding its international business and I believe it plans to use this money for overseas operations,” said Rahul Jain, an analyst at HDFC Securities.

“State Bank of India (SBI) and Bank of India (BoI) have done successful dollar bond sales and I can’t see why Axis shouldn’t see a decent amount of demand as well.”

Indian companies are on course to raising a record amount from overseas bonds this month as they target investors attracted to the Asia’s third-largest economy. With near-zero interest rates in Japan and US driving investors to emerging markets, Reliance Industries sold $1.5 billion of 10- and 30-year bonds and ICICI hired banks to raise $1 billion.

Spread narrows
In July, SBI raised $1 billion from 4.5 per cent, five-year notes priced to yield 290 basis points (bps) more than similar-maturity treasuries. The spread has since narrowed to 220 bps, RBS prices show. BoI sold $500 million of 5 1/2-year notes in March.

On October 21, Axis Bank will start meeting investors in Singapore and New York. It will then move to Hong Kong and Boston before finishing in London and Los Angeles on October 25, another person familiar with the matter said. Axis Treasurer Parthasarthi Mukherjee declined to comment.

Indian firms have raised $6 billion selling offshore bonds this year, against $1.8 billion in 2009, according to data compiled by Bloomberg. Axis Bank last sold dollar bonds in March, when it raised $350 million from 5.25 per cent notes due in September 2015.