Bank of India (BoI) has raised $750 million through its offshore bond issue, which has a tenure of five years, according to a bank and two bond arrangers close to the deal.
The issue has been priced 185 bps over the five-year US treasury yields, said sources. The initial price guidance for the issue was 205 bps above the five-year treasury yields. A BoI source said the pricing was done at 3.125%. “The issue saw good subscription from the investors across Asia, Europe and West Asia,” said the bond arranger.
“There were nearly 250 investors across Asia, Europe and West Asia, and we think this is one of the offshore bond issues by an Indian bank in recent times that has received such a robust investor interest,” said a source in Bank of India.
The funds raised will be used for overseas operations, the bank said. Moody’s Investors Service has assigned a “Baa3” rating on Bank of India’s proposed dollar-denominated senior unsecured notes, issued under its updated $5 billion medium-term note (MTN) programme.
The drawdown will be carried out by BoI’s New Jersey branch and the bonds will be listed on the Singapore Stock Exchange, said Moody’s. Citi Bank, JP Morgan, Barclays and HSBC were the joint book-runners for the bond issue, said the bank.
“The bank’s final Baa3 rating incorporates a two-notch uplift due to Moody’s assumption of a very high level of support from the government in a stressed situation,” Moody’s said. The assumption considers the government’s majority ownership in the bank and its role in providing services to small rural communities, it added.