SBI sees strong demand for 5-year dollar bond, tightens pricing

According to Business Recorder, State Bank of India drew strong demand for a five-year dollar bond it sold through its London branch, raising $500 million. Pricing tightened sharply from initial guidance, with the margin set at 88 basis points above U.S. Treasury yields, well below the 120 bps first indicated. The notes carry a 5.25% coupon paid semi-annually.

The lender had planned a $1 billion public issue in June but deferred it as heavy issuance by Indian lenders pushed up borrowing costs. It later placed $600 million of three-year bonds privately at 100 basis points over SOFR. Bankers expect a fresh issue within weeks, since the board has authorised borrowing of up to $2 billion via dollar or other major-currency bonds in the current fiscal year.

CreditSights said the final spread was broadly in line with its expectation of 90 basis points. ICICI Bank had sold notes at 100 bps and HDFC Bank at 90 bps, according to the report. Spread premiums on Indian dollar bonds had widened after the Reserve Bank of India's swap concession window raised expectations of heavy supply.