State Bank of India raises Rs 10,000 crore via infra bonds
SBI) has raised about Rs 10,000 crore through issuance of infra bonds, which carry a coupon rate of 7.4%. This is the fourth such issuance of infra-related bonds by the bank.
«The issue attracted overwhelming response from investors with bids of Rs 21,045 crore and was subscribed by more than 5 times against the base issue size of Rs 4,000 crore,» SBI said in a release.
The issue received 134 bids, indicating a wider heterogeneity participation.
The investors were across provident funds, pension funds, insurance companies, mutual funds, corporates etc.
Based on the response, the bank 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 proceeds of bonds will be utilised to enhance long-term resources for funding infrastructure and affordable housing segment.
Prior to this, the bank had raised long-term bonds of Rs 10,000 crore in August at a spread of 13 bps over corresponding FBIL G-Sec par curve.
SBI had raised infrastructure bonds worth Rs 9,718 crore in January.
The spread for that issuance was at 17 basis points.
The bank has AAA credit rating with stable outlook from all domestic credit rating agencies for these instruments. With the current issuance, the total outstanding Long-Term Bonds issued by the lender is at Rs 39,718 crore.
This issuance is also 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,» the Bank said.
On Friday, SBI's shares closed 1.79% higher at Rs 598.70.
Infrastructure bonds are long-term
