State Bank of India Issues AT1 Bonds to Raise Rs. 5,000 Cr
State Bank of India, the biggest lender in the country, has collected Rs 5,000 crore this fiscal year via its second extra tier 1 (AT1) bond offering, which complies with Basel III.
The perpetual bond, which has a call option after ten years and on each anniversary after that, is priced at an 8.34% yield, according to a statement released by the bank on Thursday.
An impressive array of investors responded to the offer, oversubscribing it by 2.65 times, with 108 bids totaling Rs 5,294 crores versus the Rs 2,000 crore base issue size. According to the statement, banks, insurance firms, provident and pension funds, mutual funds, and others are among the major investors.
According to the bank’s chairman, Dinesh Khara, the instrument’s diversified investor base and competitive price demonstrate the confidence that investors have in the bank despite its unique set of obstacles.
According to the chairman, the bank has chosen to accept bids totaling Rs 5,000 crore, with an annual coupon rate of 8.34%, based on the strong response.
The bonds have a steady outlook and an AA+ rating. The bank was able to diversify and raise long-term non-equity regulatory capital, which makes the issue noteworthy.
