IOB raises $500 mn via overseas bond sale

Indian Overseas Bank today raised $500 million via sale of dollar denominated bonds for 5.5 years. The bonds were issued at coupon rate of 405 basis points over Treasury of similar maturity. The issue was oversubscribed by about 11 times.

The bankers to the issue were Deutsche Bank, Citibank, Barclays, JP Morgan, Hongkong and Shanghai Banking Corporation and Standard Chartered Bank. About 70 per cent of the investors were from Asia, 25 per cent from Europe and five per cent from US offshore. Asset managers and fund managers lapped up 42 per cent of the issue. Banks subscribed to 20 per cent of the issue.

David Greenbaum, head of debt capital markets for South Asia at Deutsche Bank, said: “For much of 2012, offshore funding rates have not been conducive to issuance. However, with recent improvement in market tone and a successful bond issue for State Bank of India and Exim Bank of India, IOB was able to capture good pricing and generate huge interest from investors with an order book of about $5.5 billion, representing an oversubscription of almost 11 times.”