India's Federal Bank latest lender to tap dollar debt market via GIFT City, bankers say

Business Recorder reported that Federal Bank has become the newest Indian lender to borrow in dollars through its GIFT City branch. Citing two merchant bankers on Monday, the report said the private lender is seeking $500 million via a five-year dollar note. The bank's board approved the foreign-currency bond plan on Friday through its IFSC Banking Unit, and Federal Bank did not respond to a Reuters query for comment.

Indian lenders have raised $9.3 billion through dollar bonds since June 5, when the central bank introduced a discounted swap scheme for offshore forex borrowing. State-owned Union Bank of India is also seeking at least $500 million each via three-year and five-year notes. Pricing guidance points to 120 basis points above US Treasuries for three-year paper and 130 for five-year paper, the bankers added.

The Reserve Bank of India has moved up the end date of a below-market swap window meant for non-resident deposits, which has sent lenders rushing for dollars. The proceeds are intended to back those deposit balances. The bankers noted that Federal Bank is keeping both routes open because time is short.