ICICI mops up $2 bn overseas

ICICI Bank, the country's largest private sector bank, today raised a record $2 billion of dollar-denominatd debt from overseas markets to fund loans growth in the country and also global expansion.

It raised the funds through $500 million of floating-rate bonds maturing in 2010, $750 million fixed-rate notes maturing in 2012 and $750 million fixed-to-floating rate bonds due in 2022.

With this, ICICI Bank has raised $4 billion (close to Rs 20,000 crore) of debt, including tier 1 and 2 capital, in the current financial year.

Vishakha Mulye, group chief financial officer at ICICI Bank, said $1.25 billion would be used for the bank's international operations and the third tranche of $750 million is upper tier 2 capital for domestic operations.

ICICI Bank received a total order book of $8 billion from 223 investors, which included insurance companies, asset management companies, state funds and banks.

ICICI Bank priced the issues at the tighter end of the price guidance. The three-year bonds are priced at 54 basis points above London Interbank Offered Rate (Libor), while the five-year fixed rate bonds at 5.75 per cent.

The 15-year subordinated bonds, qualifying as tier 2 capital, carry fixed coupon of 6.375 per cent for the first 10 years and thereafter, 228 basis points above Libor. The six-month Libor was 5.24 per cent yesterday. One basis point is one hundredth of one per cent.

Citigroup Inc, Deutsche Bank AG and Merrill Lynch & Co managed the sale of the three bonds.

In December 2006, ICICI Bank raised $1 billion in yen-denominated loans and had touted it as the largest overseas funding raising by an Indian bank.

The $2 billion raising was the fifth time ICICI Bank tapped the global debt market in a year. In October, ICICI Bank raised $400 million through 5-year bonds, priced at 120.6 basis points over comparable US government security.

In August, the bank garnered $340 million through perpetual, hybrid tier-I securities at a coupon of 7.25 per cent. Earlier in the year, the bank had raised $300 million through a commercial paper programme in the US to support the bank's growing international operations.

The bank has also raised Rs 2,700 crore from the domestic market through issue of tier-I and tier-II bonds since January this year.