SBI raises USD 1 bn through bonds in US

New Delhi, July 23 (PTI) Amid market turbulence and
volatility, India's largest lender State Bank of India has
raised USD 1 billion (about Rs 4,700 crore) through bonds from
the US market, paving way for others to tap the market.
The successful completion of the bond issue, which was
oversubscribed 4.8 times, shows strong fundamentals of the
lender in terms of its credit profile and as India's largest
bank.
"This is a signature deal, despite market turbulence and
volatility. In terms of deal size, order book multiple,
diversification into new investors in the US, and number and
quality of investors, we achieved our objectives with this
issuance," SBI Chairman O P Bhatt said in a statement.
Acting through its London Branch, the SBI issued the
bonds at a coupon rate of 4.5 per cent per annum, similar to
the yield on SBI's previous USD 750 million bond offering
priced in October last year.
"We believe the success of this transaction will also
allow Indian issuers to more easily access the US markets,"
Bhatt said.
Bank of America, Citigrouup, Deutsche Bank AG, HSBC
Holdings, Royal Bank of Scotland and UBS acted as joint lead
managers for the Bond issue.
SBI's debut issuance under Rule 144A allows it to broaden
its debt investor base and to access large, highly capitalised
US institutional investors in the private placement market,
the bank official added.
Securities issued under Rule 144A do not have to file a
public registration statement with the Securities and Exchange
Commission, but can be sold only to qualified financial
institutions.
In terms of allocations, US-based investors received 55
per cent of the allocation while Asian investors were
allocated 28 per cent and the balance 17 per cent across
European investors.
While among the investors, asset and fund managers
subscribed for 63 per cent of the deal, commercial and
investment banks subscribed for 9 per cent, private banks
subscribed for 15 per cent and insurance/pension funds
subscribed for 4 per cent.
SBI is India's largest bank in terms of deposits,
advances and total assets. It has 12,496 branches in India,
142 international offices in 32 countries and more than 153
million accounts as of March 31, 2010. PTI