SBI to raise ₹10kcr via infra bonds
State Bank of India is likely to raise up to ₹10,000 crore next week by issuing 15-year infrastructure bonds as the country's largest mass lender looks to garner long-term capital.
«The bonds would have AAA rating from ICRA and India Ratings and the issuance will likely happen on September 22. The expectation on the coupon is around 7.45-7.50% which would represent a tight spread over comparable benchmarks,» a person aware of the development said.
The person said SBI is unlikely to carry out more infrastructure debt issues this financial year after the upcoming bond sale.
On July 31, the country's largest bank sold 15-year infrastructure bonds worth ₹10,000 crore at a coupon of 7.54%, representing an aggressive spread over the comparable government security curve of such a tenure as investor demand was strong.
Subscribers to the bond sale included provident funds, pension funds, insurance companies, mutual funds, and corporates.
The spread for the debt issuance was 13 basis points on the 15-year curve, marking the lowest such gap. In the banking sector, bonds issued by SBI typically bear the lowest coupons, given its government ownership and status as India's largest lender.SBI is the only bank to have issued infrastructure bonds with a 15-year maturity, and the lender is looking to actively develop the long-term bond yield curve, the person cited above said.
PUNJAB NATIONAL BANK
Another state-owned lender, Punjab National Bank, may raise ₹1,000 crore worth of funds through the issuance of additional tier-1 (AT-1) bonds, people in the know said.
So far, this financial year, banks have adopted a cautious approach towards issuing AT-1 bonds, preferring to raise capital through tier-2 and infrastructure bonds, instead.
