Updated January 10th, 2024 at 11:22 IST
State Bank of India taps top banks for potential $1 billion 5-year US Dollar bond issue
The Dollar-denominated senior unsecured notes will be part of State Bank of India's $10 billion medium-term note programme.
SBI US bond issue: State Bank of India has taken a significant step toward a potential five-year US Dollar-denominated bond issuance this month, appointing six major investment banks as joint lead managers, as revealed in a term sheet seen by Reuters.
Lead managers and initial guidance
Bank of America, BNP Paribas, HSBC, JP Morgan, MUFG, and Standard Chartered Bank will jointly manage the proposed issue. The initial price guidance for the five-year bond is set at a spread of 150 basis points over the five-year US Treasury yield. The settlement is scheduled for January 17, according to the term sheet.
Deal size and medium-term note programme
While the exact size of the deal is not specified in the term sheet, it indicates a "benchmark size," typically around $1 billion. The Dollar-denominated senior unsecured notes will be part of State Bank of India's $10 billion medium-term note programme.
Utilisation of proceeds
Proceeds from the bond issuance are earmarked for general corporate purposes and to meet the funding requirements of SBI's foreign offices and branches, as outlined in the term sheet.
Rating and market position
S&P Global Ratings has assigned a 'BBB-' long-term issue rating to the benchmark-sized notes proposed by the London branch of SBI. The rating agency emphasises SBI's dominant market position, strong deposit franchise, and the support of India's robust economic growth, which bolsters the bank's loan growth, asset quality, and profitability.
Earlier this month, State Bank of India successfully raised $1 billion through a syndicated loan, highlighting the bank's strategic efforts in securing funding for its operations.
The potential bond issue is poised to contribute to SBI's ongoing funding initiatives and support its diverse corporate endeavors.
(With Reuters inputs.)
Published January 10th, 2024 at 11:22 IST