The nation’s largest bank, State Bank of India (“SBI”) has announced the public issue of Lower Tier II Bonds (“Bonds”) not exceeding an aggregate amount of Rs. 100,000 million (the “Shelf Limit”) by way of issuance of Bonds in one or more tranches (the “Issue”). Pursuant to the same, SBI is undertaking a tranche issue of Bonds aggregating to Rs. 10,000 million with an option to retain over-subscription upto Rs. 10,000 million for issuance of additional Bonds aggregating to a total of Rs. 20,000 million along with an option to retain retail oversubscription upto the residual Shelf Limit (the “Tranche Issue”).
The Bonds are being issued in two Series – Series 3 and Series 4. Series 3 Bonds have a tenor of 10 years with a call option by SBI after 5 years and coupon rate of 9.75% per annum for retail applicants and 9.30% per annum for non-retail applicants. Series 4 Bonds have a tenor of 15 years with a call option by SBI after 10 years and coupon rate of 9.95% per annum for retail applicants and 9.45% per annum for non-retail applicants. The Bonds are not redeemable at the option of the bondholder or without the prior consent of RBI.. The Tranche Issue will remain open for subscription between Monday the February 21 & Monday the February 28, 2011 (both days inclusive) and will be listed on both the BSE and NSE. The Bonds have been assigned ratings “CARE AAA” by CARE and “AAA/Stable” by CRISIL. The Lead Managers to the Issue are Citigroup Global Markets India Private Limited, Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited.
The Executive Committee of the Central Board of SBI had accorded an approval in December 2010 for raising Tier II Capital for an aggregate amount of Rs 100,000 million by way of public issue of Lower Tier II Bonds during the remaining period of FY 2010-11 and in FY 2011-12 in different tranches.
About SBI:
SBI had total assets of Rs. 10,534 billion & total deposits of Rs. 8,041 billion and recorded a net profit of Rs. 91.7 billion as on March 31, 2010. SBI had a domestic network of 12,567 branches, 150 foreign offices in 32 countries and a staff strength of 2,00,490 as on June 30, 2010. SBI also has the largest ATM network in the country with over 21,751 ATMs of State Bank Group as on June 30, 2010.
DISCLAIMER: All Investors proposing to participate in the Tranche Issue should invest only on the basis of information contained in the Prospectus filed with the Securities and Exchange Board of India, the BSE and the NSE. The Prospectus is available on the website of BSE at www.bseindia.com, the websites of the Lead Managers at www.citibank.co.in, www.kotak.com and www.sbicaps.com and the website of SBI at www.sbi.co.in.