SBI raised Rs. 5,000 cr for current financial year

State Bank’s Basel III compliant Additional Tier 1 Bond Issuance

SBI raised Rs. 5,000 cr for current financial year

State Bank of India (SBI), the country’s largest lender, has raised Rs. 5,000 crores today through its second Basel III compliant Additional Tier 1 bond issuance for the current financial year at a coupon rate of 8.34%.

The tenor of this bonds is perpetual with a call option after 10 years and every anniversary thereafter. The issue attracted overwhelming response from a wide range of investors with 108 bids of Rs. 5,294 crores and was oversubscribed by about 2.65 times against the base issue size of Rs 2,000 crores.

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The investors were across mutual funds, provident & pension funds, banks, insurance companies etc. Shri Dinesh Khara, Chairman SBI, stated that the tight pricing and the diverse investor base for an instrument which has its own challenges shows the trust investors place in the Bank. Based on the response, the Bank has decided to accept bids of Rs. 5,000 crores at a coupon rate of 8.34% payable annually.

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The Bonds were rated AA+ with a stable outlook by CRISIL and ICRA. The issuance is significant as the Bank has been able to diversify and raise long-term non-equity regulatory capital.

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