SBI raises $300 mn through overseas bond to fund biz growth

New Delhi: State Bank of India (SBI) has raised $300 million (about Rs 2000 crore) through bonds from overseas investors to fund its business growth.

SBI chairperson Arundhati Bhattacharya

SBI chairperson Arundhati Bhattacharya

The bank has concluded the issue of $300 million AT1 Basel III compliant non-convertible, perpetual non call 5-year subordinated, unsecured note or bonds at a coupon 5.5 per cent payable semi-annually under our USD 10 billion RegS MTN Programme, SBI said in a statement.

Under the Basel-III norms, AT-1 bonds come with loss absorbency features, meaning that in case of stress, lenders can write off such investments or convert them into common equity if approved by the Reserve Bank (RBI).

"The notes will be issued through our Dubai International Financial Centre branch on September 22 and will be listed on Singapore Stock Exchange," it said.

According to rating agencies, the dollar denominated bond issuance by the SBI will provide Indian banks with an alternative funding option and would be positive for the sector.

The bond issuance by the bank is the first cross-border deal in the dollar AT1 market from an Indian bank and would open up a new source of much-needed regulatory capital and provide a pricing benchmark for other banks keen to access the dollar AT1 market, they said.

AT1 issuance by Indian banks has thus far been limited to the domestic market, where both market depth and investor appetite has been lacking.

Updated Date: Sep 15, 2016 09:19 AM

Also Watch

It's A Wrap: Omerta star Rajkummar Rao in conversation with Parul Sharma
  • Thursday, April 26, 2018 In the Kanjarbhat community, a campaign against 'virginity tests' is slowly gaining ground
  • Thursday, April 19, 2018 Watch: National-level skater and coach Dhwanit Rele trains and nurtures budding athletes
  • Monday, May 14, 2018 FOMO Episode 1: Google Assistant, This is America, Sonam's wedding & Global Warming
  • Saturday, May 19, 2018 Social Media Star: Rajkummar Rao and Bhuvan Bam open up about selfie culture, online trolls

Also See