SBI to raise Rs 1,000 crore via Tier-II bonds

State Bank of India (SBI) will raise up to Rs 1,000 crore through a lower Tier-II bond issue, primarily being hawked to retail investors.

This is part of the bank’s Tier-II offering and will comprise an issue of Rs 500 crore with an option to retain oversubscription up to Rs 500 crore for issue of additional bonds totalling Rs 1,000 crore.

“The bank will launch the bond issue for retail investors next week, and will have a range of such products in future, said Chairman O P Bhatt.

“This bond issue comes as a part of our Tier-II offerings and to some extent will help the bank meet its capital requirements. It will also increase our ability to raise long-term resources,” Bhatt added.

 

The bonds will be issued in two series and will have a maturity of 10 years and a face value of Rs 10,000.

They will carry a coupon rate of 9.25 per cent per annum for Series 1 and 9.50 per cent per annum for Series 2 (both lower Tier-II bonds).

These bonds are not redeemable at the option of the bondholder or without the consent of the Reserve Bank of India. The bonds are proposed to be listed on the National Stock Exchange of India.

The bonds will be open for subscription from October 18. The issue closes on October 25, with an option to close earlier in the event of oversubscription. The allocations of all categories will be made on a first-come-first-serve basis.