State Bank of India prices $750-mn bond at 4.87%, tightens pricing

Tightens pricing by 40 bps on oversubscription

The country’s largest lender, State Bank of India, has priced a five-year $750-million bond issuance at a coupon rate of 4.87 per cent. 

The bonds are benchmarked against five-year US treasury and priced at a spread of 145 basis points over the benchmark. The oversubscription of seven times allowed SBI to tighten the pricing by 40 bps (i.e. from initial guidance of T+185 bps area to final pricing of T+145bps). 

This is the largest spread compression amongst all Indian bond issuances during current year.

SBI in late night statement said the issuance received an overwhelming response with a final order book in excess of $ 2.9 billion across 181 accounts.

The Bonds will be issued through our London branch as of 05th May 2023 under SBI’s MTN Programme and will be listed on Singapore SGX and the India INX, Gift City.

The Notes are expected to carry a final rating of BBB- and BBB- from Standard & Poor’s and Fitch respectively.

The successful issuance demonstrates that bank can efficiently raise funds from world’s leading fixed-income investors even during periods of heightened volatility, it added.

Dinesh Khara, chairman, SBI said the successful issue highlights SBI's strong investor base in offshore capital markets. This indicates global investors' confidence in the Indian banking sector in general, and in SBI in particular, and it also attests to SBI's unparalleled access to global capital markets.

Citigroup, Emirates NBD Capital, HSBC, J.P. Morgan, MUFG and Standard Chartered Bank acted as Joint Global Coordinators and Joint Lead Managers for this offering.