SBI looks to raise around Rs 5K crore via perpetual bonds before end of Feb

The State Bank of India is looking to raise around Rs 5,000 crore ($573.38 million) via Basel III-compliant additional Tier-I perpetual bonds before the end of February, three sources aware of the matter said on Wednesday. 

The country's largest lender could have a call option at the end of either five years or 10 years on the issue, the sources added.

"The lender has already started talking about the issue and based on investor feedback, they will take a final decision on the call option as well as the timing to launch this issue. 

Insurance companies are expected to be among the bidders," one of the sources said. 

 

SBI did not immediately reply to a Reuters email seeking comment. The sources declined to be named as they are not authorised to speak to the media. 

This would be the first such issuance from any lender in over three months. 

Incidentally, SBI was the last issuer that had tapped this route, when it raised Rs 5,000 crore at a coupon of 7.98 per cent in October. This issue had a call option at the end of 10 years. 

Bankers also expect some mutual funds to participate in the latest issue since, earlier this year, the market regulator allowed mutual funds to value perpetual bonds based on their call option, a move that has improved appetite for such debt.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)