Syndicate Bank raises $500mn via dollar bonds

State-run lender, Syndicate Bank today raised $500 million via sale of dollar-denominated bonds at coupon rate of 4.125 per cent.

The bank has raised funds for five and a half years at a spread of 355 basis points above the comparable US Treasury.

The issue was a part of Syndicate Bank’s $1 billion medium-term note program. Deutsche Bank, Citibank, JP Morgan, Standard Chartered Bank and HSBC were the book runners of the issue.

David Greebaum, head of debt origination for South Asia at Deutsche Bank said that there was strong interest from investors in Europe and the Middle East. The bonds were oversubscribed by 4.8 times.

“With $4.6 billion of dollar bond issuance from Indian banks already completed in 2012, shrewd issuers like Syndicate Bank will continue to seek strategies to differentiate investor pools and issuance structures,” said Greenbaum.

There has been a series of overseas bond issues from India since late July this year. Lenders like State Bank of India, EXIM Bank, Indian Overseas Bank, Union Bank of India, ICICI Bank and Axis Bank among others have tapped this route for fund raising so far.

Merchant bankers expect more issuances in the rest of the calendar year 2012 if Treasury yields and spreads continue to favor Indian issuers. Moreover, a slew of reforms announced by the government recently have helped renew investor interest in Indian papers.