State Bank of India (SBI), the largest lender in India, announced on Friday that it successfully raised INR 10,000 crore (approximately USD 1.34 billion) through an infrastructure bond issue. This marks the fourth time that SBI has tapped the infrastructure bond market for funds.
The bonds issued by SBI carry a coupon rate of 7.49%, as confirmed by a statement from the bank. The funds raised through this issuance will be allocated for on-lending to infrastructure projects and affordable housing initiatives.
The issuance of these bonds reflects a spread of 12 basis points (bps) over the corresponding FBIL G-Sec par curve. Notably, the bank had previously raised INR 10,000 crore through long-term bonds on August 1, 2023, at a spread of 13 bps over the corresponding FBIL G-Sec par curve.
SBI enjoys a AAA credit rating with a stable outlook from all domestic credit rating agencies for these instruments. With this latest issuance, the total outstanding long-term bonds issued by the bank amount to INR 39,718 crore.
Originally aimed at raising INR 4,000 crore, the bond issue was oversubscribed by over five times, receiving 134 bids worth a total of INR 21,045 crore. The investors in this bond issuance included provident funds, pension funds, insurance companies, mutual funds, and corporates.
Compared to the previous infra bond issuance in August 2023, SBI offered a slightly improved coupon rate, representing a 0.12% spread over the corresponding FBIL G-Sec par curve, compared to the 0.13% spread in the previous issue.
