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IDBI Bank has raised $500 million through sale of long-term bonds in international markets at a coupon of 3.75 per cent (300 basis points over the US Treasury Bill).
The bond offering, which has been made by the bank’s Dubai International Financial Centre (DIFC) branch, is significant, as it comes in a highly uncertain market marked by risks of bankruptcy of Cyprus and domestic political developments, with the DMK pulling out of the United Progressive Alliance at the Centre.
The success of the current issue, which is part of IDBI Bank’s $3.5 billion medium-term notes programme, is reflective of the faith in India’s long-term growth story, debt market observers said.
The bonds to be issued by the DIFC branch will have a tenure of five years and 10 months and will be listed on the Singapore stock exchange.
Confirming that IDBI Bank had mobilised $500 million through the bond offering, a top official said that substantial response to the issue came from investors in the East (63 per cent from Asia, and the rest mostly from Europe).
With this bond offering, IDBI Bank has so far this fiscal raised $2 billion in foreign currency.
Standard Chartered Bank and HSBC were arrangers for the offering. This bond offering comes close on the heels of Bank of India, another public sector lender, raising $500 million in international markets at US Treasury plus 280 basis points last week.
The bond offering, which has been made by the bank’s Dubai International Financial Centre (DIFC) branch, is significant, as it comes in a highly uncertain market marked by risks of bankruptcy of Cyprus and domestic political developments, with the DMK pulling out of the United Progressive Alliance at the Centre.
The success of the current issue, which is part of IDBI Bank’s $3.5 billion medium-term notes programme, is reflective of the faith in India’s long-term growth story, debt market observers said.
The bonds to be issued by the DIFC branch will have a tenure of five years and 10 months and will be listed on the Singapore stock exchange.
Confirming that IDBI Bank had mobilised $500 million through the bond offering, a top official said that substantial response to the issue came from investors in the East (63 per cent from Asia, and the rest mostly from Europe).
With this bond offering, IDBI Bank has so far this fiscal raised $2 billion in foreign currency.
Standard Chartered Bank and HSBC were arrangers for the offering. This bond offering comes close on the heels of Bank of India, another public sector lender, raising $500 million in international markets at US Treasury plus 280 basis points last week.
Rush for overseas funds
With rupee funds remaining costly here, more Indian companies are accessing offshore markets for their funding requirements.
Over half a dozen Indian organisations, including RIL, PowerGrid, ICICI , HDFC Bank, Exim Bank, and Bharti Airtel, have till date raised about $4.25 billion so far in 2013.
srivats.kr@thehindu.co.in
Source: thehindubusinessline
Over half a dozen Indian organisations, including RIL, PowerGrid, ICICI , HDFC Bank, Exim Bank, and Bharti Airtel, have till date raised about $4.25 billion so far in 2013.
srivats.kr@thehindu.co.in
Source: thehindubusinessline
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