Axis Bank sells $250-m bonds to global investors at 3.25%

Private sector lender Axis Bank today managed to price its USD 250-million on-tap 10-year bond sale to international investors at the same rate of 3.25 per cent at which it had bonds last November.
The notes, issued by the bank's Dubai International Finance Centre branch, are denominated in US dollars and bear a fixed interest of 3.25 per cent, it said, adding that they are due in 2020.
The money raised will be utilised for funding requirements of the bank's foreign branches and for general corporate purposes, the bank said in a statement late this evening.
The issue was launched with an initial pricing guidance of 1.50 per cent over US t-bills, and the large investor demand made it possible for the bank to narrow it to 1.35 per cent over the T-bills, making it one of the tightest issues by a domestic lender in recent past.

The issue was over-subscribed five times and Asia contributed 63 per cent, Europe 15 per cent, and the Middle Eastern investors 22 per cent, it said.
International rating agency Moody's gave the issue a Baa2 rating with stable outlook and said the existing rating does not change with the additional borrowing.

The tap bond offering has the same terms and conditions as the existing notes, it added.
The Baa2 rating reflects the status of the bank as the third-largest private sector bank by assets and its sizeable retail deposit franchise and importance to the national payments system and also its baseline credit assessment of Baa3.

The rating for the proposed notes is in line with the bank's global local currency deposit rating.
In a note, another rating agency Standard & Poor's said gave a BBB- rating to the issue and said it is not affected by the bank's proposal to upsize the issue. The notes will be consolidated with the bank's existing USD500 million 3.25 percent notes due 2020, which the bank issued on November 21, 2014.