SBI Raises $500M Bonds Amid Strong Global Demand

State Bank of India (SBI) successfully raised USD 500 million through bonds issued by its London branch. These ‘Regulation S’ bonds carry a coupon rate of 5.25 percent.

Understanding the ‘Regulation S’ Bonds

These specific bonds are classified under ‘Regulation S’, which means they are exempt from the registration requirements set by the US Securities and Exchange Commission (SEC). This allows for their issuance outside the United States.

• The bonds were benchmarked against the 5-year US Treasury.
• They were priced at a spread of 88 basis points over this benchmark.
• The coupon rate for the bonds is 5.25 percent.

Strong Investor Confidence and Market Reception

The bond offering garnered significant interest from a diverse range of global investors, leading to an overwhelming response. The peak order book reached USD 2.46 billion.

• A total of 145 investors participated in the offering.
• The bonds are scheduled for listing on SGX-ST, India INX, and NSE-IX.

SBI Chairman CS Setty stated that the successful pricing, even amidst global uncertainties, underscores the robust demand for SBI’s bonds. He noted it highlights the bank’s diverse investor base in offshore capital markets, facilitating efficient fundraising.

Setty added that the issue’s pricing was the tightest among all Indian public bond issuances since the RBI swap window announcement. This reflects global investors’ confidence in India’s growth narrative and SBI’s credit quality, also demonstrating contained borrowing costs for Indian issuers.

Global Partners in the Offering

• BNP PARIBAS
• Citigroup
• Credit Agricole CIB
• Emirates NBD Bank PJSC
• HSBC (B&D)
• MUFG
• Standard Chartered Bank