IDBI Bank prices 100 million Swiss franc bonds at MS+274 bps

India's IDBI Bank priced its three and half year Swiss franc bond issue at mid-swaps plus 274 basis points, becoming the first lender to raise funds in this currency in 2012.

The state-run bank launched its at least 100 million Swiss franc bond issue earlier in the day and Deutsche Bank is the sole arranger of the deal.

"Against our launch size of 100 mln Swiss Francs we have got an oversubscription on the very first day of the launch," said Melwyn Rego, executive director at the bank.

Settlement in Swiss franc issuances take 3 to 4 weeks from the bond issue.

The transaction follows a deal by Rural Electrification Corp (REC) in February, in which the state-run power financing company raised 200 million Swiss francs through a five-year borrowing, at mid-swaps plus 305 basis points.

In 2011, three Indian banks -- Union Bank of India, State Bank of India, and Export-Import Bank of India -- printed Swiss franc deals totalling 660 million Swiss francs.

Among these, State Bank of India's 325 million Swiss franc five-year issue was the biggest one, which was priced in March at 185 basis points over mid-swaps.

Several issuers have been showing interest in raising funds in Swiss francs as it works out cheaper for Indian borrowers compared with US dollar borrowings. Moreover, it also offers the issuer a chance to diversify its funding sources.

Source: EconomicTimes