HDFC Bank to raise up to $500 mn abroad

S&P assigned a 'BBB-' rating to the bank's proposed issue

HDFC Bank, the country’s second largest private sector lender, planned to raise up to $500 million (Rs 30,000 crore) by issuing senior unsecured notes to foreign investors through its Bahrain branch, bankers familiar with the development said.

The issue is part of the bank’s $2-billion medium-term notes programme. The three-year bonds are priced at 255 basis points (bps) above the three-year US treasury yield. Standard Chartered Bank, Bank of America Merrill Lynch, Barclays and JP Morgan have been appointed to manage the issue.

“The final guidance for HDFC Bank’s US Regulation S benchmark bonds maturing in November 2016 is set at 260 bps above the US treasury,” said a banker aware of the development.

Standard & Poor’s Ratings Services has assigned a ‘BBB-’ rating to the bank’s proposed issue. “The proposed notes will constitute direct, unconditional, unsecured and unsubordinated obligations of the bank. They shall, at all times, rank on a  par among themselves and with all other unsecured obligations of the bank. The rating on the notes is subject to our review of the final issuance documentation,” the rating agency said in a note.

Moody's Investors Services has assigned a 'Baa2' rating to these bonds.

In March, the bank had raised $500 mn at a three per cent coupon rate by selling five-year bonds.