SBI mops up record $1.25 bn in overseas bond sale

MUMBAI: State Bank of India has mopped up $1.25 billion in overseas debt sale through a dual tranche bond programme, making it the largest ever offering from a domestic issuer.
The bank raised $750 million in 5-year money at US treasury interest rate plus 205 basis points, while it priced the 10-year $500 million issue at 225 bps over the treasury, one of the merchant bankers told PTI.
The programme was completed late last night, said the source.
SBI has broken the record set by Oil India earlier this week by raising 25 per cent more than the oil explorer.
On Tuesday, Oil India had raised $1 billion from a dual tranche issue, making it the single largest dual tranche Reg S issue from the country by then.
The SBI issue is also cheaper than OIL issue as the oil PSU had priced the five-year of $500-million at US treasury rate plus 222.5 bps, and the 10-year money of the same size at treasury plus 272.5 bps.
The sharp tightening in final pricing of the Reg S SBI issue shows the investor appetite, according to the i-banker.
A Regulation S transaction means, the US-based American investors cannot participate in the issue.
The bank had given an initial pricing of 240 bps over the US treasury for the 5-year money and 265 bps over the treasury for the 10-year bond. The US treasury is trading at around 2.75 per cent.
The bank chairperson could not be reached for comments, while the CFO refused comments.
The merchant banker said the issue received huge over subscription with the order book for the 5-year issue reaching $3 billion, and that for the 10-year bond touching $2.9 billion.
The 5-year issue attracted bids from 230 accounts, while the same for the 10-year issue stood at 290 accounts.
The investor breakdown by regions stood at 53 per cent non-resident US investors; 24 per cent from Asia; and 23 per cent from Europe for the 5-year Reg S issue, while the investor type were 70 per cent asset managers/fund houses; 15 per cent banks; 9 per cent private banks and 6 per cent insurance and others.
With regard to the 10-year tranche, of the 290 accounts, 40 per cent came from the non-resident US investors, 33 per cent from Europe and the rest 27 per cent from Asia.
The investors included 50 per cent asset managers/fund houses, 30 per cent banks and the remaining 20 per cent insurers, corporates and others.