By Dharamraj Dhutia
MUMBAI (Reuters) -State Bank of India has raised $500 million by issuing dollar-denominated bonds maturing in five years, the lender said on Tuesday, days after S&P Global Ratings upgraded India’s sovereign credit rating for the first time in 18 years.
India’s largest lender by assets will pay a semi-annual coupon of 4.50% on the dollar bonds, which will be issued through its London branch and listed on the Singapore Stock Exchange and the NSE International Exchange (NSE IX) at GIFT City, the lender said.
The notes will be rated ‘BBB’ by S&P, in line with the issuer’s ratings.
Last month, the global rating agency upgraded India’s long-term sovereign credit rating to ‘BBB’ from ‘BBB-‘.
Yields on the dollar bonds of SBI, widely considered as a so-called quasi-sovereign issuer with credit ratings closely linked to the sovereign rating, had dropped after the upgrade, and will benefit the lender for fresh fundraising.
More favourable placement opportunities are arising for state-linked entities and a broader category of banks and non-banking finance companies, said Maksim Zenkov, deputy head of emerging markets fixed income at financial data aggregator Cbonds.
“The upward trend in the government bond yields serves as an additional stimulus to consider tapping the dollar debt market.”
In November 2024, SBI raised $500 million through five-year dollar bonds at a yield of 5.13%, which was at a spread of 82 bps over Treasury yield with similar maturity, the tightest spread achieved by the lender, per bankers.
(Reporting by Dharamraj Dhutia and Nishit Navin; Editing by Eileen Soreng, Janane Venkatraman and Devika Syamnath)
