State Bank of India’s SBI $500 million bond issue has been priced at the tightest spread among Indian public-sector bond issuances since the RBI swap window announcement, reflecting strong global investor confidence in India’s growth story and SBI’s credit quality, Chairman Challa Sreenivasulu Setty said.
SBI $500 Million Bond Issue Draws Strong Global Demand
SBI — acting through its London branch — has successfully priced $500 million of Regulation S bonds at a coupon rate of 5.25 per cent.
In addition, the bonds were priced at a spread of 88 basis points over the five-year US Treasury benchmark.
The issue received strong demand from global investors, with the order book peaking at $2.46 billion from 145 investors.
SBI had initially provided price guidance at around 120 basis points over the benchmark.
Strong investor demand enabled the bank to revise the guidance to 88 basis points, resulting in price compression of 32 basis points.
Why SBI’s Bond Pricing Matters
“The successful pricing of $500 million, during the ongoing global uncertainties, is a testament to the strong appetite for bonds of SBI and to the diversified investor base the Bank has in offshore capital markets,” Setty said.
He said the diversified investor base allowed SBI to efficiently raise funds from leading global fixed-income investors.
Setty said the tight pricing demonstrated the confidence of global investors in India’s growth story as well as SBI’s credit quality.
“The tight pricing achieved amid the evolving global macro environment has demonstrated containment in the borrowing cost for issuers from India,” he said.
SBI Bond Ratings and Global Listings
Moreover, the bonds have been rated BBB by S&P, BBB- by Fitch and BBB+/Stable by CareEdge Global.
The notes will be listed on the Singapore Exchange, India International Exchange and NSE International Exchange.
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