)
State-run IDBI Bank has successfully raised $500 million through a five-year bond sale in the international markets at a coupon of 3.75% which is likely to be the cheapest ever for the bank.
"The final pricing for the $500-million international debt issue from IDBI Bank got tightened by 15 basis points to 300 bps over the US treasury bills. The issue marks the first long five-year tenor issuance by the bank," Managing Director and Head of Debt Capital Markets at Standard Chartered Bank South Asia Jujhar Singh told PTI from Singapore today.
StanChart was the lead arranger to the issue.
The money was raised by IDBI's Dubai International Financial Centre branch yesterday and received an over-subscription of $2.25 billion from 190 accounts from Asian and European investors, Singh said, adding the bonds will be listed on the Singapore Exchange.
The bank managment could not be contacted immediately for comments.
On the rationale for five-year, 10 months tenor, Singh said the issue will help IDBI spread its debt distribution profile and meet its pricing targets, which helped it achieve a final pricing -3.5 bps tighter than secondary trading levels of its $bonds maturing in 2018.
"These bonds maturing in January 2019 are the longest tenor bonds issued by IDBI in the $bond market, achieving the lowest-ever coupon and tightest-ever pricing for IDBI Bank for a five-year tenor," Singh said.
On the large oversubscription and tight pricing despite the challenging market conditions due to the Cyprus issue and political uncertainty in the country due to the key ruling ally pulling out of the government yesterday, Singh said the bank could price the issue very tight by choosing an innovative tenor of five years and 10 months and opting to announce the issue on a day which saw no competing supply from Asia ex-Japan.
