SBI Plans To Raise $750 Million Through Overseas Market

State Bank of India (SBI) is looking to tap the overseas market again by raising $750 million via bond sales. The transaction is being arranged by JP Morgan, BoFA Securities, Standard Chartered Bank and HSBC, sources were quoted as saying by The Economic Times.

The bond sale of the lender, which accounts for a fifth of the country’s outside banking sector, is likely to open next week. It is also expected to correspond with the commencement of the two-month-long autumnal festive season, when retail credit demand reaches its peak in Asia's third-largest economy.

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The source further revealed that the bonds will be benchmarked against 5-year US treasury bonds and likely to be priced at a spread of 140-145 basis points over the benchmark.

Another source said that SBI is raising this fund through its $10-billion medium-term note program, with the funds earmarked for lending and various debt-related activities. "SBI has appointed four foreign banks to raise around $500 million - $750 million through the issuance of US dollar-denominated bonds. The bond will be priced in line with the existing bond price,” it said.

Earlier this year, the bank obtained board approval for a $2 billion foreign currency bond issuance. In April, SBI successfully secured $750 million through 5-year Regulation S (Reg S) bonds with a coupon rate of 4.875%. Notably, in February, SBI raised a syndicated social loan of $1 billion, marking its inaugural foray into the social loan market.

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SBI is currently facing the maturity of $600 million in bonds this month, with an additional $800 million worth of instruments maturing in early 2024.