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State Bank of India raises $600 million through dollar bonds

S&P Global Ratings had assigned a BBB long-term issue rating to benchmark-sized notes that the London branch of SBI issued

SBI Funds Management

Photo: Bloomberg

Abhijit LeleManojit Saha Mumbai

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State Bank of India (SBI), the country’s largest lender, raised $600 million by issuing a five-year paper on Wednesday from a clutch of investors across the globe as part of its $10 billion medium-term note programme.

This was the first fundraising from India through dollar bonds in 2024.

S&P Global Ratings had assigned a BBB long-term issue rating to benchmark-sized notes that the London branch of SBI issued.

Sources involved with the deal said the issuances received robust demand as the order book peaked at $3.5 billion.

“Large, high quality, long-only asset managers from Asia, Europe, the Middle-East, and Africa participated in the transaction,” a source said.

The bond is priced 117 basis points over the US treasury bonds of comparable maturity, which works out to be a yield of 5.1 per cent.

Bank of America, Standard Chartered, HSBC, BNP Paribas, JP Morgan, Mitsubishi UFJ Financial were the arrangers for the deal. Some of the investors were T Rowe Price, Schroders, among others. 

“The rating on the notes reflects the long-term issuer credit rating on SBI (BBB-/Stable/A-3). Our ratings on SBI reflect the bank’s dominant market position and its strong deposit franchise,” S&P said.

India’s robust economic growth supports SBI’s loan growth, asset quality, and profitability, the global rating agency said in a statement.

This fundraising comes close on the heels of $1 billion the lender issued last week through offshore syndicated loans.

SBI’s gross advances in global operations grew 8.11 per cent year-on-year (Y-o-Y) to Rs 5.27 trillion in the July-September period of 2023 and 9.09 per cent over the previous quarter. 

Recently, SBI successfully placed $250 million senior unsecured green floating rate notes, referred to as ‘green notes’, which mature on December 29, 2028. These were basically issued to replace instruments that were coming for maturity.

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First Published: Jan 10 2024 | 9:34 PM IST

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