Union Bank of India (532477.BY) has priced its Swiss franc bond at a yield of 200 basis points over mid-swaps, a person familiar with the matter said Friday.

The Swiss franc bond is the first such deal by an Indian borrower in more than two decades and highlights the search by Indian banks for a fresh pool of investors as they try to avoid growing supply pressures in traditional overseas bond markets.

The state-run lender has raised CHF160 million through the four-and-a-half year bond sale, comfortably beating its target of raising at least CHF125 million, the person, who asked not to be named, told Dow Jones Newswires. The deal is in line with the initial guidance of a spread in the area of 200 basis points over mid-swaps.

Barclays PLC (BARC.LN) is managing the deal, the person added.

According to Dealogic data, the last Indian company to issue a Swiss bond was Industrial Credit and Investment Corp. of India in July 1988.

The deal follows the largest euro-denominated bond sale from an Indian borrower in November 2010, when the country's biggest lender, the State Bank of India, raised EUR750 million.

Bankers say more such issues may follow, with lenders such as IDBI Bank (500116.BY) mulling ringgit-denominated bond issues, among other non-dollar bond sale plans, to escape the rising yields investors are demanding for owning Indian credit, with supply tipped to continue growing in 2011.

Standard Chartered expects Indian banks to sell as much as $8 billion worth of dollar bonds through 2011. That would be more than the roughly $6 billion sold in 2010 according to Dealogic data.

Indian banks are boosting their overseas asset base to help feed the growing demand for overseas credit from Indian companies, which are facing rapidly rising borrowing costs at home as tight liquidity and aggressive monetary tightening by the central bank forces local interest rates higher.

Prospective issuers over the next few months could include first time issuer Syndicate Bank (532276.BY ), IDBI Bank and Infrastructure Development Finance Co. Ltd. (532659.BY ), as well as more traditional issuers like Axis Bank Ltd (532215.BY ) and State Bank of India (500112.BY), bankers said.

-- By Bijou George, Dow Jones Newswires; 91 22 61456113; bijou.george@dowjones.com