SBI raises $500 mn in 3-year dollar debt

Nation's largest lender State Bank of India today raised USD 500 million in forex debt in three-year dollar money as part of its medium term notes (MTN) programme, making it the second fund raising by it this year.
The RegS bond programme has been sold through its London branch and is priced at Libor plus 95 bps. A RegS or Regulation S issue means that under the US Securities Commission norms, the instrument will be denominated in the greenback, but resident Americans cannot buy into them.
"We have successfully concluded a benchmark bond sale, raising USD 500 million, priced at Libor plus 0.95 per cent. The three-year money was drawn through our London branch," a senior bank official told PTI.

The notes will be traded on the Singapore Stock Exchange, the official added.
With this, the bank has raised USD 4 billion out of its USD 10 billion MTN plan, including USD 400 million in perpetual bonds last year.
The bank is also in the process of raising Rs 15,000 crore directly from the market next fiscal year through a clutch of instruments, including QIP, preferential issue among others, for which it has secured shareholder approval.

On January 17 this year, SBI had raised USD 500 million in a five-year dollar money sale, through its London branch and got listed on the Singapore Exchange. Before this, the bank had raised overseas debt by issuing USD300 million in September 2016. Prior to that, it had raised USD 1.25 billion in another dollar money sale in February 2014.

Today's bond sale is part of its immediate plans to raise USD 1.5 billion, the bank had informed the BSE on March 20. Its board meeting on March 24 had cleared the plan.
All the three global rating agencies have rated the drawdown on par with the bank's existing ratings, which again is aligned to the sovereign ratings.
Moody's has assigned a Baa3 rating to the US dollar denominated senior unsecured notes, issued under its USD10 billion MTN programme. It has also given a positive outlook on the ratings.
SBI represents 16.3 per cent of system loans and 17.6 per cent of deposits as on end-March 2016, and government owns 60.18 per cent in the bank. All these metrics will jump with the merger of five associate banks effective April, it said.

Another agency S&P in a note assigned 'BBB-' long-term issue rating to the issue. The rating on the notes reflects the long-term counterparty credit rating on SBI, it said.
Fitch also assigned BBB-/stable) rating to the senior unsecured debt and said the instruments are rated at the same level as the bank's issuer default rating.
Under its long term fund raising plans, the bank has also concluded AT1 Basel III-compliant non-convertible, perpetual non-call five-year subordinated, unsecured notes at a coupon 5.5 per cent payable semi-annually.