SBI to raise $1-billion by Bond Issue
India’s largest public sector lender, the State Bank of India is planning to raise $1 billion by bond issuance as a part of the bank’s Medium Term Note program or MTN, a tool that allows raising funds through various products including floating rate notes or on a fixed rate, subjected to getting necessary regulatory approvals.
MTN offers flexibility in fund raising program and it is the reason why most of the companies opt for it.
SBI accounts for one-fifth of the total deposits and credit in the banking sector in India. The banking major aims to use proceeds to carry forward its further growth plans. SBI chairman OP Bhatt, a few days back, had hoped that the bank would register a credit growth of 20% during the financial year 2009-10.
The bank, rated BBB- by Standard & Poor’s and Fitch Ratings, is expected to lend the foreign currency funds raised from the issue to Indian companies having international exposure. The bank also plans increase its presence across the globe opening new overseas branches.
SBI’s Chief financial officer SS Ranjan indicated that bank would issue senior global dollar bond with five-year tenure.