The third Additional Tier 1 bond issuance, this fiscal year, by State Bank of India (SBI), which is compliant with Basel III, raised Rs 3,717 crore at an 8.25% coupon rate.
According to RBI standards, the funds will be used to increase Additional Tier 1 Capital, the bank’s overall capital base, and boost capital adequacy.
These bonds have a perpetual tenor with a call option after ten years and on each anniversary after that.
The issue had a resoundingly positive response from investors, garnering bids totaling Rs4,537 crore, and was around 2.27 times oversubscribed compared to the base issue of Rs2,000 crore. SBI received 53 bids in total, which indicates greater involvement. The investors included insurance firms, provident funds, and pension funds, according to a statement from SBI.
The bank has chosen to take Rs3,717 crore at an annual coupon rate of 8.25% based on the response.
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