SBI raises $1 bn via bonds issue from US market

State Bank of India, has raised $1 billion (about Rs 4,700 crore) through an issue of bonds to qualified institutional buyers.

State Bank of India, acting through its London Branch, successfully priced an offering of $1 billion of senior unsecured bonds due 2015, the bank said.

"This is a signature deal, despite market turbulence and volatility. In terms of deal size, order book multiple, diversification into new investors in the US, and number and quality of investors, we achieved our objectives with this issuance.

"We believe the success of this transaction will also allow Indian issuers to more easily access the US markets," SBI chairman O P Bhatt said.

SBI's debut issuance allows it to broaden its debt investor base and to access large, highly capitalised US institutional investors in the private placement market, the bank official added.

The offering was priced at a coupon rate of 4.50 per cent per annum.

In terms of allocations, US-based investors received 55 per cent of the allocation while Asian investors were allocated 28 per cent and the balance 17 per cent across European investors.

In terms of investor type, asset and fund managers subscribed for 63 per cent of the deal, commercial and investment banks subscribed for 9 per cent, private banks subscribed for 15 per cent and insurance/pension funds subscribed for 4 per cent.

Strong interest from the US-based investors underscores SBI's strong credit profile and its position as India's largest bank. Shares of State Bank of India were trading at Rs 2,496.95 on NSE, up 0.84 per cent from previous close.