SBI raises Rs 10,000 crore via Tier-II bonds at 7.81% coupon rate

Gets over Rs 15,000 crore worth of bids According to bond market sources, SBI raised a debt capital of Rs 3,100 crore through Additional Tier-I bonds (AT1) earlier this financial year

State Bank of India, the country’s largest lender, has raised Rs 10,000 crore in debt capital by issuing Tier-II bonds — at a coupon rate of 7.81 per cent — to meet the regulatory capital requirement and support its business growth

The bank said in a statement on Wednesday that these Basel-III-compliant bonds, its first Tier-II offering this financial year, had a tenor of 15 years, with the first call option after 10 years. The issue attracted bids worth Rs 15,907 crore and was oversubscribed almost four times against the base issue size of Rs 4,000 crore with 98 bids.

SBI Chairman Dinesh Khara said: “Wider participation and heterogeneity of bids demonstrated the trust investors placed in the country’s largest Bank.”

Of the Rs 10,000 crore raised, Rs 4,000 crore worth of Tier-II bonds would replace those maturing for the same amount, and the remaining Rs 6,000 crore would bolster capital base. The bank’s capital adequacy ratio as of the end of June 2023 stood at 14.56 per cent, with Tier-I accounting for 11.97 per cent, and Tier-II 2.56 per cent.

According to bond market sources, SBI raised a debt capital of Rs 3,100 crore through Additional Tier-I bonds (AT1) earlier this financial year. It is also likely to issue AT1 bonds worth Rs 7,000 crore to replace bonds maturing for a similar amount.