Syndicate Bank raises $400 mn

The total orderbook of the Offering was in excess of $3 billion and was oversubscribed 8 times

Bangalore-based public sector lender Syndicate Bank on Friday said that it had raised $400 million through a senior unsecured bond offering.

The five-and-a-half-year bond was priced at a spread of 240 basis points over the five-year US Treasury.

The offering is denominated in dollars, and would bear a fixed interest of 3.875 per cent per annum. The bonds would mature on December 04, 2019. The total order-book of the offering was in excess of $3 billion and was over-subscribed eight times, with demand from 225 investors. Geographically, 71 per cent of the notes were allocated to Asia, 25 per cent to Europe, the Middle East and Africa, and the remaining four per cent to offshore US accounts.

In terms of breakdown by investor type, fund managers took the majority at 40 per cent, followed by banks at 37 per cent, corporates at 13 per cent, private banks at six per cent and the remaining four per cent going to the public sector.

“We are happy to conclude this transaction in the backdrop of the optimistic sentiments generated by the new government in India. We interacted with investors across geographies and were able to effectively communicate the strategy and the strengths of the bank. The offering demonstrates the stature that we enjoy in global markets,” said Sudhir Kumar Jain, Chairman and Managing Director, Syndicate Bank. Citigroup, Deutsche Bank, HSBC, SBI Capital Markets and Standard Chartered Bank acted as joint lead managers for the offering.

The bonds are rated ‘Baa3’ by Moody's and ‘BBB-’ by S&P and were issued pursuant to the bank’s $2 billion Medium-Term Notes (MTN) programme. The offering was the first issuance of MTNs by an Indian bank, which was done through its offshore branch, since the new government was elected in India.

The government of India holds 67.39 per cent as of March 31, 2014 in Syndicate Bank, which has a total asset base of $41.98 billion as of March 31, 2014. It has a network of 3,250 domestic branches and 1,946 ATMs across India.