SBI garners Rs 5k cr via AT1 bonds

Mumbai: India’s largest lender State Bank of India (SBI) has raised Rs5,000 crore through its second Basel-III compliant additional tier-1 (AT1) bond sale this fiscal. The bank, in a statement on Thursday, said the perpetual bond with a call option after 10 years and every anniversary thereafter, is priced at a coupon of 8.34 per cent. Dinesh Khara, chairman, SBI, said: “The tight pricing and the diverse investor base for an instrument, which has its own challenges, shows the trust investors place in the bank.

The chairman said that going by the high response, the bank has decided to accept bids of Rs5,000 crore at a coupon rate of 8.34 per cent payable annually. The bonds were rated AA+ with a stable outlook. The issuance is significant as the bank has been able to diversify and raise long-term non-equity regulatory capital.”

The issue got an overwhelming response with an oversubscription of 2.65 times from a range of investors with 108 bids of Rs5,294 crore against the base issue size of Rs2,000 crore.