SBI raises Rs 10,000 crore at 7.49 per cent coupon rate
The bank expressed satisfaction with the response and decided to accept Rs 10,000 crore at a coupon rate of 7.49% payable annually.
NEW DELHI: State Bank of India, country’s largest lender, announced on Friday it has raised Rs 10,000 crore via its fourth infrastructure bond issuance. The bonds, issued at a 7.49% coupon rate, received overwhelming response from investors, with bids totaling Rs 21,045.10 crore, oversubscribed the issue size of Rs 4,000 crore by over five times.
The bond received 134 bids, showcasing a diverse range of investors including provident funds, pension funds, insurance companies, mutual funds, and corporate, the bank said. SBI plans to utilise the proceeds from these bonds to enhance long-term resources for funding infrastructure projects and the affordable housing segment.
The bank expressed satisfaction with the response and decided to accept Rs 10,000 crore at a coupon rate of 7.49% payable annually. This rate represents a spread of 12 basis points (bps) over the corresponding Financial Benchmarks India (FBIL) G-Sec par curve, as stated in the bank’s official statement.
“Based on the response, SBI has decided to accept Rs 10,000 crore at a coupon rate of 7.49% payable annually. This represents spread of 12 bps over the corresponding FBIL G-Sec par curve,” the statement said. Earlier, on August 1, 2023, the bank had raised long-term bonds of Rs 10,000 crore at a spread of 13 bps over the corresponding FBIL G-Sec par curve.
The bank holds AAA credit rating with a stable outlook from all domestic credit rating agencies for these instruments. With the latest issuance, the bank’s total outstanding long-term bonds now stand at Rs 39,718 crore. “This issuance is very significant as the bank has been successful in raising long-duration bonds successively at a finer spread. We believe that this issuance may help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor,” it said.