SBI raises Rs 10,000 cr via 15-year infra bonds, demand robust

economictimes.indiatimes.com:

State Bank of India on Monday concluded the sale of ₹10,000 crore worth of infrastructure bonds amid robust demand from investors. The country's largest lender may opt for the same instrument for its next round of fundraising through debt, potentially within the current quarter. The bank on Monday sold the 15-year infrastructure bonds at a coupon of 7.54%, representing an aggressive spread over the comparable government security curve of such a tenure, the bank said in a release.

ET had reported on July 20 that SBI is likely to raise up to ₹10,000 crore through infrastructure bonds. The total bids received at the 7.54% mark were ₹19,728 crore while the total bid book was ₹21,968 crore, sources said. The spread for the debt issuance was 13 basis points on the 15-year curve, marking the lowest such gap.

«The spreads based on the par curve which is created by FBIL (Financial Benchmarks of India) is based on the par curve as on the previous day's close. SBI's latest infra bond issuance is at the tightest ever spread over that. They are likely to aim for another infrastructure bond issuance, perhaps in this quarter.

There is a broad spectrum of investors who have shown strong demand for the infra bonds,» a source said. SBI's latest issuance marks only the second time that any bank has issued infrastructure bonds of a 15-year tenure. SBI had raised infrastructure bonds worth ₹9,718 crore for the same tenure in January.

The spread for that issuance was at 17 basis points. Infrastructure bonds are long-term debt instruments with a maturity of at least seven years. Given that these instruments are used for providing finance to the infrastructure sector, banks do not have to maintain cash reserve ratio (CRR) and statutory