SBI set to raise around USD 500 million with 5-year bond sale in overseas debt market

The nation's largest bank SBI is set to raise around USD 500 million in the international debt market as part of its USD 10-billion medium-term notes programme through a five-year dollar bond sale.

"The SBI is in the international debt market with a benchmark issue to raise around USD 500 million in US dollar denominated bonds. The money will be raised through its London branch and will be listed on the Singapore Exchange," two investment banking sources told PTI here on Monday.

When contacted State Bank refused to comment citing confidentiality clause as the market moving nature of the information.

All the three international rating agencies have accorded investment grade ratings to the proposed USD 500 million bond sale by the country's largest lender SBI which has been away from the overseas debt market for some time now.

SBI last raised overseas debt by issuing dollar-denominated notes worth USD 300 million last September and prior to that in February 2014, it had raised USD1.25 billion n another dollar money sale.

The bank has so far raised USD 3.5 billion out of its USD 10 billion MTN programme, including USD 400 million in perpetual bonds. The bank had also concluded AT1 Basel III- compliant non-convertible, perpetual non-call five-year subordinated, unsecured notes at a coupon 5.5 per cent payable semi-annually under USD 10 billion RegS bond programme.

Moody's has assigned a Baa3 rating to the senior unsecured notes, issued under its USD 10-billion MTN programme.

The drawdown will be carried out from its London branch, and the bonds will be listed on the Singapore Stock Exchange, Moody's said in a statement.

Fitch has also assigned 'BBB-' ratings to the programme that constitutes direct, unconditional, subordinated and unsecured obligations of the issuer.
"The issue will at all times rank pari-passu among themselves and with all other unsubordinated and unsecured obligations of State Bank," Fitch said, adding the tenor of he issue is expected to be around five years.

S&P too assigned 'BBB-' long-term issue rating in line ith the sovereign rating, to the proposed issue of SBI's senior unsecured notes.

The rating on the notes reflects the long-term counterparty credit rating on SBI, S&P said.