State Bank of India's Basel III Compliant Tier 2 Bond Issuance

State Bank of India (SBI), the country's largest lender, is the first Public Sector Bank to raise ₹ 7,500 crores today at a coupon rate of 6.93% through its Basel III compliant Tier 2 bond issuance for the current financial year. The bonds are issued for a tenor of 10 years, with call option after 5 years and each anniversary dates thereafter and are rated AAA with stable outlook from ICRA Limited and CARE Ratings Limited.

The issue attracted an overwhelming response from investors with bids approximately 3 times against the base issue size of ₹ 5,000 crores. The total number of bids received was 101 indicating participation from diverse set of qualified institutional bidders. The investors were across provident funds, pension funds, mutual funds, banks etc. Shri C S Setty, Chairman said that wider participation and heterogeneity of bids demonstrated the trust investors place in the country's largest Bank.

Based on the response, the Bank has decided to accept ₹ 7,500 crores at a coupon rate of 6.93% payable annually for a tenor of 10 years with a call option after 5 years and each anniversary dates thereafter.

Earlier this year, the Bank had also raised ₹ 25,000 crores equity via QIP which was oversubscribed by more than 4.5 times. MTN of USD 500 mio at a very fine rate was also raised for a tenor of 5 years during the financial year.

Shares of State Bank of India was last trading in BSE at Rs. 889.35 as compared to the previous close of Rs. 886.90. The total number of shares traded during the day was 436700 in over 16415 trades.

The stock hit an intraday high of Rs. 894.60 and intraday low of 882.60. The net turnover during the day was Rs. 388433276.00.

Source : Equity Bulls

Keywords

StateBankofIndia INE062A01020 SBI Basel3Compliant Tier2Bonds