SBI raising $300 mn via medium term bonds, assigned BBB- ratings by S&P

Issue likely to be concluded on Thursday and has a green shoe option to raise more money

State Bank of India (SBI) is in the market to raise about $ 300 million through medium-term notes to garner resources for lending international customers.

The fundraising round by India’s largest bank comes after it mopped up $1 billion last week. The new issue is likely to be concluded on Thursday and it has a green shoe option to raise extra amounts based on market conditions and pricing trends, said market sources. SBI is raising the money to meet the requirements of customers of its global business, said a bank executive.

S&P Global Ratings on Wednesday assigned 'BBB-' long-term issue rating to benchmark-sized notes that the London branch of SBI proposes to issue. The US dollar-denominated senior unsecured notes will be part of SBI's $10 billion medium-term note programme.

The ratings reflect SBI's dominant market position and its strong deposits. India's robust economic growth supports SBI's loan growth, asset quality, and profitability, said S&P in a statement.

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SBI has also successfully placed $250 million senior unsecured green floating rate notes, referred to as ‘Green Notes’, which mature on December 29, 2028. These were basically issued to replace instruments which were coming for maturity.

Its gross advances in global operations recorded 8.11 per cent year-on-year (YoY) growth at Rs 5.27 trillion in September 2023 and 9.09 per cent growth over previous quarter (June 2023).

Local lending and trade finance business were major drivers of customer credit. Growth in customer credit is majorly contributed by operations in the United States, West Asia and Japan.

Local lending had 33.4 per cent share while trade finance had 31.6 per cent share in loan book. Rest was India-linked business.