Bank of Baroda debt raise tops $1 billion under central bank's window

Business Recorder reported that India's Bank of Baroda has raised $400 million by reissuing its dollar bonds due in August 2031, now offering a yield of 5.3890%. With this sale, the state-owned lender's total under the central bank's cheaper funding window has reached $1.1 billion, matching State Bank of India. Merchant bankers said Bank of Baroda is only the second state-owned bank and the fifth issuer overall to pass $1 billion through that facility.

The reissue followed two earlier sales in August: $400 million of three-year bonds at a 5.1140% coupon and $300 million of five-year notes at 5.3180%. Those notes were priced at spreads of 90 basis points and 100 bps over Treasuries, respectively. The reissue was struck at a higher yield than the earlier five-year notes.

Across Indian lenders, dollar bond issuance between June and August totalled $11.65 billion, with ICICI Bank responsible for over a quarter of it. Banks are racing to finish these sales before the hedging window for the central bank's dollar deposit programme closes on Monday, and most of the money is likely to go toward supporting depositors.