SBI raises euro 750 mn via five-year bonds

State Bank of India has raised 750 million euros through global capital markets to fund euro-denominated assets. This was the first euro-bond offering by the country’s largest lender.

The bonds maturing in 2015 carry a fixed annual coupon of 4.50 per cent. The bank has tapped the euro bond as part of the policy of diversifying its debt capital markets profile, SBI said in a statement.

The bond offering was done under its $5-billion Medium Term Note (MTN) Programme. The bank has issued bonds just under four billion including euro bonds under the MTN plan, said a senior SBI official.

The strong demand generated after a single day’s book building followed a three-day road show and enabled SBI to raise funds under challenging market conditions. This transaction was the first Asian EUR transaction in 2010 and the first Indian EUR transaction in the last three years. The deal is the largest single-tranche bond ever completed by SBI, as well as the largest EUR denominated issuance from India.

The order book was well diversified both in terms of the geography and investor type. The deal generated €1.3bn in orders from 180 investors. The major allocations were made in the following manner: Germany (24 per cent), United Kingdom (21 per cent), France (15 per cent), the Netherlands (11 per cent) and Switzerland (11 per cent). The joint lead managers for the issue included Barclays Capital, Credit Agricole and UBS.