The country’s largest lender, State Bank of India (SBI) on Friday announced that it has raised Rs. 10,000 crores at a coupon rate of 7.49% through its fourth infrastructure bond issuance.
The issue attracted an overwhelming response from investors with bids of Rs. 21045.10 crores and was oversubscribed by more than 5 times against the base issue size of Rs. 4,000 crores. The total number of bids received was 134 indicating wider participation with heterogeneity of bids, the bank said in a statement.
The investors were across provident funds, pension funds, insurance companies, mutual funds, corporates, etc. The proceeds of bonds will be utilized in enhancing long-term resources for funding infrastructure and the affordable housing segment, it added.
Based on the response, the bank has decided to accept Rs. 10,000 crores at a coupon rate of 7.49% payable annually.This represents the spread of 12 bps over the corresponding FBIL G-Sec par curve.
Prior to this, SBI had raised long-term Bonds of Rs. 10,000 crores on 1st August, 2023 at a spread of 13 bps over the corresponding FBIL G-Sec par curve.
With the current issuance, the total outstanding long-term bonds issued by the bank is at Rs.39,718 crores.
“This issuance is also very significant as the bank has been successful in raising long-duration bonds successively at a finer spread. We believe that this issuance may help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor.
The bank has AAA credit rating with a stable outlook from all domestic credit rating agencies for these instruments.
