HDFC Bank raises $1.75 billion in dollar bonds, taps RBI swap window

India's largest private sector lender seeks to tap three- and five-year bonds in its second dollar issuance in two months, as banks capitalise on RBI's concessional swap window

HDFC Bank, India’s largest private sector lender, is back in the dollar bond market with a sale targeting more than $1 billion through three-year and five-year bonds, marking its second such issuance in two months as it seeks to capitalise on the Reserve Bank of India’s concessional swap window.

 

As per an exchange notification, the bank has taken ratings from global rating agencies S&P and Moody’s for a proposed $1.75 billion issue. S&P has assigned a BBB rating to the notes, while Moody’s has assigned Baa3.

 

The three-year bond has an initial price guidance of T+120 bps, while the five-year bond has T+130 bps. The final amount raised by the bank will depend on how much it can compress the spreads.

 

 

HDFC Bank was the first lender to raise $750 million through five-year bonds at T+90 bps.

 

Indian banks have made a beeline for the overseas bond market over the past 10 days, raising more than $3 billion through US dollar-denominated bonds.

 

Recently, IDFC First Bank raised $500 million through its maiden three-year dollar bond at a 5.62 per cent coupon, with BlackRock, Capital Group and AllianceBernstein among the investors.

 

Kotak Mahindra Bank raised $650 million through its debut five-year dollar bond at a 5.47 per cent coupon, priced at 108 bps over US Treasuries. ICICI Bank raised $750 million through a five-year bond at a 5.41 per cent coupon, taking its dollar debt fundraising to $2.05 billion in about a month across three transactions.

 

State Bank of India raised $500 million through a five-year dollar bond at a 5.25 per cent coupon and a spread of 88 bps over US Treasuries. Bank of Baroda raised $700 million through three- and five-year bonds, priced at spreads of 90 bps and 100 bps, respectively, over US Treasuries.