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Public sector lender Union Bank of India has raised $350 million through unsecured notes due in 2018 through its Hong Kong branch. The bank had last raised $350 million in August 2012. This is part of the bank's $2 billion Medium Term Note Programme.
The bonds are rated 'Baa3' by Moody’s and 'BBB –' by Standard & Poor.
The notes will be denominated in US dollars, and will bear fixed interest of 3.625% per annum, with interest payable semi-annually in arrears, the lender said.
The bond issue was 4.3 times over subscribed with 136 accounts in Asia and Europe participating in the transaction.
The bond issue was the lender's fourth in as many years.
The bond issue is priced 300 basis points over the 5-year US Treasury Note.
“The strong perception of our credit by the international community has ensured an impressive outcome for the transaction, allowing us to price a new 5.5-year bond at levels inside our existing secondary yield curve,” said D. Sarkar, Chairman and Managing Director of Union Bank.
The money raised will be used to fund the bank's overseas operations in Hong Kong and Dubai, which was launched last month. With London operations likely to start within the next two months, the bank may raise more funds, said a senior official from the bank.
Though the issue has been oversubscribed, the response has been relatively weaker, perhaps due to too many issuances from Indian banks crowding the market, the official said.
Barclays, BNP Paribas, BofA Merrill Lynch, Citigroup, JP Morgan and Standard Chartered Bank acted as joint book runners and lead managers on the transaction.
