SBI to decide on overseas bonds issue shortly

Mumbai, Oct 21: State Bank of India, which was downgraded by ratings agency Moody’s recently, on Friday said it will decide on an over $500 million bonds issue next month.

“That’s a call we would be taking in November...whether to go for it at all, and if we do decide to go in, then the extent of the amount,” said Mr Hemand Contractor, Managing Director for International Banking.

He said it would be a “benchmark issue”, which normally means the minimum issue size would be at least $ 500million.

The bank had earlier announced that it would double its MTN borrowings to shore up the tier—II capital to $10 billion this fiscal.

The SBI Chairman, Mr Pratip Chaudhuri, in September, had hinted at raising over $1 billion in November but sounded sceptical following the downgrade by Moody’s.

On October 4, Moody’s Investors Service had cut rating on SBI’s financial strength to D+ from C— and pointed to issues with asset quality and lower capital adequacy.

The bank’s core tier—I capital stood a low 7.6 percent as of the June quarter.