ICICI Bank raises SGD 225 mn from a 7-yr bond sale programme

ICICI Bank has raised SGD 225 million (Singapore dollars) from a seven-year bond sale programme through its Dubai branch at a coupon rate of 3.65%.

"We have successfully raised SGD 225 million through our Dubai branch yesterday at a coupon rate of 3.65 percent. Significantly, the seven-year bond will also yield 3.65%," a bank spokesperson told PTI here today.

The bank had given an initial price guidance of 4% while the final pricing saw of tightening of 0.35%. The issue was oversubscribed by over 13 times to SGD 3 billion, the lead banker to the issue StanChart said.

This is the fifth debt raising by the private sector bank this fiscal with it earlier in the year raising USD 1 billion in two instalments of USD750 million and USD 250 million. The bank had also raised a 1 billion yuan bond earlier in the year apart from a 100 million Swiss franc bond.

StanChart, HSBC and ANZ were the lead managers to theissue, which was closed yesterday.

This was the second issue in 2013, with Exim Bank on January 8 raising USD 750 million through a European bond sale, which was overbought by 8.5 times at a 4% coupon.

"ICICI's new issue has established a new benchmark for them in the Singapore-dollar-denominated bond market. It has also helped them achieve investor diversification, raise seven-year pricing tighter than the USD curve, and establish a benchmark for them in the SGD bond market," StanChart India managing director, capital markets Jujhar Singh told PTI from London.

It's heartening to see an Indian issuer pricing 2013's first SGD issue so tight, he added.

Singh further said the issue, despite having a seven-year tenor is dearer by only 0.02% as the bank's existing dollar bond maturing by 2018 is priced at 3.63%.

The pricing has also been helped by the timing as it came soon after the resolution of the US fiscal cliff apart from the fact that the traders are flushed with cash after the Christmas and new year holidays, said Singh.

On the tenor extension by two years, he said, ICICI Bank wanted to diversify its investor profile. Also, generally insurers want longer tenor and the bank has quite a few insurers in its investor kitty in Singapore.

As much as 36% of the 102 investors were insurers followed by 31% HNIs of private banks, 17% of fund houses and 16% constituted international banks, Singh said.

Majority of these investors are from Singapore (78%) 19% from Greater China and 3% from Europe.

On the rationale for the huge demand for Indian debt, Singh said since September there has been a substantial improvement in sentiment about the Indian growth as since then the sovereign downgrade threat has eased.