BoB hits overseas debt market; to raise at least $500 mn

Bharti Airtel, this Monday raised 250 million euros at a coupon of 385 bsp above the EUR MS rate

State-run Bank of Baroda today became the second domestic issuer to approach the overseas bond market in the New Year with a 5.5-year $500 million (around 3,100 crore) issue.

"We have just announced a benchmark ($500 million or above) US dollar unsecured senior bond issue (REG S) for a 5.5-year money. The final guidance for the issue, maturing in 2019 has been set at 330 bps over the US treasury," one of the merchant bankers, who wished not to be named citing confidentiality issues, told PTI.

This Monday, the largest telecom Bharti Airtel raised 250 million euros at a coupon of 385 bsp above the EUR MS rate by reopening its 750 million euro issue which it had raised in December at 4.05%.

Bank of Baroda, which is the second largest PSU lender in the country, could not be contacted for comment.

While Bharti issue was aimed at preparing a war-chest for the forthcoming spectrum auction, for which it today submitted an application to participate in the auctions, the BoB issue could be used for onlending purposes for its overseas clients.

In the just-concluded year, domestic corporates and financial institutions had raised a record $16 billion international debt, up 60% from 2012.

The overseas fund raising had ebbed following the May 24 tapering talk by the US Fed, which spiked interest rates in Western markets. Since then there were only a few issues including HDFC Bank's $500 million in October and ICICI Bank's $750 million in November last.