SBI to Raise Up to $1 Billion Via Five-Year Dollar Bonds After India’s Rating Upgrade
State Bank of India (SBI.NS), the country’s largest lender, is planning to raise funds through dollar-denominated bonds maturing in five years, according to three merchant bankers. The bank is targeting at least $500 million, with the issue size potentially increasing to $1 billion depending on investor demand. The move comes just days after S&P Global Ratings upgraded India’s sovereign credit rating for the first time in 18 years.
Bankers said SBI has already seen strong investor interest and expects pricing tighter than its previous issues. The lender has provided an initial guidance of U.S. Treasury yield plus 105 basis points, but the final spread could come in below 100 bps given robust demand. The notes will be rated ‘BBB’ by S&P, in line with SBI’s issuer rating. The bank has not commented publicly on the planned fundraising.
The sovereign upgrade has improved fundraising prospects for state-linked entities, with SBI’s dollar bond yields falling in recent weeks. Analysts say this will give the lender a favorable window to tap global markets. Last November, SBI raised $500 million through a similar five-year dollar bond at a yield of 5.13%, marking its tightest spread of 82 bps over U.S. Treasuries at that time.
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