SBI raises ₹3,717cr via bond issuance

The bank said this is the third Basel III compliant additional tier 1 (AT1) bond sale and the latest issue was closed at a coupon rate of 8.25 per cent.

The proceeds will be used to augment its additional tier 1 capital and overall capital base of the bank and also for strengthening capital adequacy in accordance with RBI guidelines.

These perpetual bonds have a call option after 10 years and every anniversary thereafter.

On the investor interest, the bank said the issue attracted an overwhelming response from investors with bids of ₹4,537 crore from 53 bids from provident and pension funds and insurance companies and was oversubscribed by about 2.27 times against the base issue of ₹2,000 crore.

Given the high response, the bank has decided to accept ₹3,717 crore at a coupon rate of 8.25 per cent payable annually. This represents spread of 66 bps over the corresponding G-Sec par curve on March 8.

Prior to this bond sale the bank had raised ₹4,544 crore on February 21, 2023, from similar bonds at a spread of 71 bps over the corresponding G-Sec par curve on the date of bidding.