IDBI Bank raises $300mn via overseas bond sale at 5.06% coupon

The state-run IDBI Bank today became the first lender to hit the overseas debt market this year, raising USD 300 million in a 5.5-year money, priced at 5.061 per cent.
For the city-based lender, this is first issue since last March when it had raised USD 500 million.
The current RegS bond sale got an over-subscription of USD 2.2 billion from overseas investors, said Citigroup, which was one of the lead bankers to the issue along with RBS and PNB Paribas.
Regulation S bonds are senior unsecured debt instruments sold to foreign investors in which US-based American investors cannot participate.

Despite repeated calls, the bank did not respond.
The bank had given an initial pricing guidance of US Treasury plus 370 bps, but the bank could price it cheaper due to the overwhelming response from investors, as a result the final pricing got tightened by 20 bps to T-plus 350 bps over five-year treasury, Citi said.

Commenting on the successful bond sale, Citi India's debt capital markets head Neville Fernandes told PTI that "IDBI Bank moved swiftly to take advantage of the robust market conditions and abundant liquidity in the international debt markets, carefully navigating through the news headlines like economic weakness in China and the US Fed's rate decision later today."

The issue has been rated BB+ by S&P, Baa3 by Moody's and BBB- by Fitch.
"This shows strong international investor appetite for strong credit from the county," RBS India head of debt capital markets Manmohan Singh told PTI.
The bonds will be listed on the Singapore Stock Exchange.
As much as 77 per cent of investors were Asian region with the rest coming in from European region, while the investor type included 40 per cent banks, 39 AMCs, 15 per cent private banks and the rest insurers and others, Singh added.
Earlier this month, telecom major Bharti had raised USD 400 million or 350 million Swiss francs from the Swiss market in a six-year money.

This was Bharti's second bond sale this year after it had raised 250 million euros in January in the run-up to spectrum auctions. Last March, the company had raised USD 1.5 billion in overseas debt sale in two tranches.
After a massive bond sale last year worth USD 16 billion, up 60 per cent from 2012, the domestic companies have been going slow to tap international bond market following rising interest rates there.
The overseas fund raising ebbed after the May 24 tapering talk by the US Fed, which spiked interest rates in Western markets. Since then there were only a few issues, including HDFC Bank's USD 500 million in October and ICICI Bank's USD 750 million in December.