Business | Banking

State bank of India sells dollar bond

Nation’s biggest lender by market value raised $1.25b in sale

  • Bloomberg
  • Published: 18:28 July 26, 2012
  • Gulf News

Mumbai: State Bank of India, the nation’s biggest lender by market value, raised $1.25 billion (Dh4.59 billion) in the first US dollar-denominated bond sale by a local company in five months.

The bank’s London branch issued 4.125 per cent, five-year debentures to yield 375 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg.

The last dollar-denominated offering by an Indian company was in February, when Axis Bank Ltd sold 5.125 percent notes due September 2017 at a 440 basis-point spread over Treasuries, according to the data.

“State Bank of India needed to raise funds and was seeing demand from overseas investors,” Nitin Kumar, a Mumbai-based banking analyst at Quant Broking Private Ltd, said in a phone interview today (Thursday). “They’ve managed to raise money at a good spread considering the market conditions.”

More state-owned banks may issue notes in the dollar debt market in coming quarters as a result, he said.

State Bank of India’s notes changed hands at a premium of about 368 basis points as of 12.20pm in Mumbai, according to Royal Bank of Scotland Group Plc prices. The lender has $13.6 billion of bonds and loans outstanding, according to data compiled by Bloomberg.

Two calls to the office telephone of Hemant Contractor, State Bank of India’s Mumbai-based managing director and head of international banking seeking comment on the sale went unanswered.

Bank of America Corp, Barclays Plc, Citigroup Inc, Deutsche Bank AG, JPMorgan Chase & Co and UBS AG managed the debt sale, the Bloomberg data show.

State Bank of India’s shares traded 0.6 per cent lower at Rs2,057 (Dh134.3) as of 12.35pm in Mumbai, the least since June 4.

Reliance Industries Ltd., operator of the world’s biggest refining complex, raised $1.5 billion in a sale of 5.4 per cent notes in February, according to data compiled by Bloomberg.

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