SBI likely to begin issuance of Rs 10,000-cr rupee bonds soon

Mumbai: State Bank of India (SBI) is likely to kick off rupee bond issuances for the current financial year towards the end of this month or early next month with a sale of additional tier-1 bonds, sources aware of the development said

The bond sale could be for up to ₹10,000 crore, with a base size of ₹3000 crore and a green shoe option of ₹7,000 crore, the sources said. The bonds may have a call option after 10 years and the issue date could be June 29.

Last week, SBI’s board approved raising of funds worth ₹50,000 crore through bond sales in the current financial year.

Following a successful dollar bond issuance in April, SBI is unlikely to opt for the overseas bond route at the moment as aggressive rate hikes by global central banks have stoked volatility in international bond markets.

“Something should be coming by July; it generally takes around 3-4 weeks to get the government approval. Given the way the forwards are behaving, dollar-denominated bonds don’t make as much sense as INR bonds right now for SBI. They are considering all three options within tier-1, tier 2, and infrastructure bonds,” a source said.

Late April, SBI had successfully tapped global bond markets and concluded the issuance of $750 million worth of securities with a maturity of 5 years at a coupon of 4.875% payable semi-annually. The spread between US bonds of relevant maturity and SBI’s bonds was considered to be an aggressive one, indicating firm demand for the state-owned bank’s debt offering, treasury executives had said.

In the previous financial year, SBI had commenced sales of AT-1 bonds in September.

HDFC, NABARD Issues

HDFC on Monday concluded a large debt sale, raising funds worth ₹13,187 crore through 10-year bonds. The coupon for HDFC’s bonds was set at 7.75%, while the arrangers to the issue were Axis Bank and ICICI Bank, HDFC said in an exchange filing. On Monday, yield on the 10-year benchmark government bond closed at 7.02%. Government bond yields are the benchmarks used to determine pricing of corporate debt.

Meanwhile, National Bank for Agricultural and Rural Development (NABARD) is likely to tap debt capital markets this week to raise up to ₹5,000 crore.

Source By: economictimes

Leave a Reply

Your email address will not be published.