State Bank of India (SBI) acting through its London Branch, successfully priced an offering of US$ one billion of senior unsecured bonds due 2015 ("the Offering"), which are to be rated Baa2/Stable by Moody's and BBB-/Stable by S&P.
The Offering was made pursuant to Regulation S under the US Securities Act outside of the United States, and in the United States in a private placement solely to certain qualified institutional buyers in compliance with Rule 144A under the U.S. Securities Act. The Offering was oversubscribed 4.8 times and saw demand from over 350 investors.
Having accessed the Regulation S market several times in the past, the Offering, being SBI's debut issuance with a Rule 144A component, allowing it to broaden its debt investor base and to access large, highly capitalized US institutional investors in the private placement market.
The Offering was priced at a coupon of 4.50% per annum, similar to the yield on SBI's previous US$750 million bond offering priced in October 2009, despite more volatile market conditions related to the ongoing sovereign debt crises and renewed concerns on a double dip in global economic growth.
The total order book was in excess of US$4.5 billion. In terms of allocations, US-based investors received 55% of the allocation while Asian investors were allocated 28% and the balance 17% across European investors. In terms of investor type, asset and fund managers subscribed for 63% of the deal, commercial and investment banks subscribed for 9%, private banks subscribed for 15% and insurance/pension funds subscribed for 4%. Strong interest from US based investors underscores SBI's strong credit profile and its position as India's largest bank.
Bank of America Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, Royal Bank of Scotland Group Plc and UBS AG acted as Joint Lead Managers for the Offering.
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SBI's Chairman Mr. O P Bhatt said the following in respect of the Offering, "This is a signature deal, despite market turbulence and volatility. In terms of deal size, order book multiple, diversification into new investors in the US, and number and quality of investors, we achieved our objectives with this issuance. We believe the success of this transaction will also allow Indian issuers to more easily access the US markets."
About State Bank of India
SBI is India's largest bank in terms of deposits, advances and total assets. It had 12,496 branches in India, 142 international offices in 32 countries and more than 153 million accounts as of March 31, 2010.