By Khushita Vasant
State Bank of India has raised $1 billion by selling dollar
bonds, according to a term sheet reviewed by The Wall Street
Journal Friday, the latest Indian issuer to tap the international
bond market.
India's largest lender by assets sold five-year, senior,
unsecured bonds at a spread of 255 basis points over comparable
U.S. Treasurys and a price of 99.904. The 144A/Regulation S bonds
will yield 3.271%.
Reg S status means the bond doesn't need to be registered with
the Securities & Exchange Commission, while Rule 144A enables
it to still be sold to qualified institutional buyers in the
U.S.
Investors sent in orders more than four times the $1 billion of
bonds the bank offered. Over 250 issuers participated in the sale.
Investors from Asia made up 56% of total investors, Europe and Asia
made up 20% and 24%, respectively.
"State Bank of India will set the tone for other issuers in
2013," said David Greenbaum, head of debt capital markets for South
Asia at Deutsche Bank AG.
Indian issuers are taking advantage of swathes of foreign money
flooding Asia as central banks in the U.S. and Europe loosen
monetary policy to support growth.
So far this year, India's Exim Bank, the Dutch units of telecom
service providers Tata Communications Ltd. (500483.BY) and Bharti
Airtel Ltd. (532454.BY), ICICI Bank Ltd. (532174.BY), HDFC Bank
Ltd. (500180.BY) and Bank of India (532149.BY) have raised $4.4
billion by selling dollar bonds.
Thereafter, state-run IDBI Bank Ltd. (500116.BY) raised $500
million and wind-turbine maker Suzlon Energy Ltd. raised $647
million by selling dollar bonds. Some issuers are also diversifying
sources of fund raising, with Exim Bank raising 200 million
Australian dollars ($210.9 million) by selling offshore bonds
denominated in the Australian currency.
BNP Paribas SA, Citigroup, Deutsche Bank, HSBC Holdings PLC,
JPMorgan Chase & Co. and SBI Capital Markets were managers for
State Bank of India's bond sale.
Write to Khushita Vasant at khushita.vasant@wsj.com