SBI issues AT1 notes at an 8.34% interest rate, raising Rs 5,000 crore

19 Jan 2024 , 10:33 AM

The largest lender in the nation, State Bank of India, announced in a press release that it has raised Rs 5,000 crore through Basel-III Additional Tier-I bonds at an 8.34% interest rate on January 18.

CRISIL and ICRA have rated the bonds ‘AA+’ with a ‘Stable’ outlook.

These bonds have an infinite tenor, with a call option after ten years and on each anniversary after that.

According to the statement, Dinesh Khara, the Chairman of SBI, said, ‘The tight pricing and the diverse investor base for an instrument which has its own challenges shows the trust investors place in the Bank.’

With 108 bids totaling Rs 5,294 crores, the issue drew interest from a diverse spectrum of investors and was about 2.65 times oversubscribed compared to the Rs 2,000 crore base issue size, according to SBI. The investors included banks, insurance firms, mutual funds, provident and pension funds, and more.

The lender this week completed the issue of $600 million in senior unsecured fixed rate notes under Regulation-S. The notes have a five-year maturity and a five percent payment that is payable semi-annually.

The bank completed the placement of $250 million in senior unsecured green floating rate notes prior to this offering.

SBI’s $10 billion medium-term note program includes this green note issuance, which matures on December 29, 2028. It was carried out through a private placement made possible by its London branch.

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