Key Takeaways
- SBI and Nabard to raise a combined ₹14,500 crore via bonds.
- SBI’s ₹7,500 crore issuance is the first major bank bond sale this fiscal year.
- Market participants expect these deals to encourage further bond issuances.
State Bank of India (SBI) and the National Bank for Agriculture and Rural Development (Nabard) are set to raise a total of ₹14,500 crore through bond issuances on Friday, marking a significant return to the debt market.
SBI Bond Issue Details
SBI will raise up to ₹7,500 crore through 10-year Tier 2 bonds. This includes a base issue of ₹5,000 crore and a green-shoe option of ₹2,500 crore. The bonds will carry a five-year call option, according to a source.
The bank is expected to offer a coupon rate between 6.90% and 6.95% for the sale. SBI Capital Markets is arranging the issue.
First Major Bank Issuance This Fiscal
This bond issuance by SBI represents the first major bank bond sale in the current financial year. Banks had previously stayed away from the bond market due to ample liquidity and muted credit growth.
Nabard’s Bond Plans
Nabard plans to raise up to ₹7,000 crore through bonds maturing in 39 months.
Market Impact
Market participants said these issuances are likely to encourage other players to follow suit, potentially revitalizing the corporate bond market.
