State Bank of India (SBI) has completed its $1-billion bond issue at a coupon rate of 4.5%. The bank had borrowed $750 million at 4.5% coupon rate in October, 2009. The objective behind the fund raising is to meet its overseas lending requirement. The fund was raised by the bank at New York through its London Branch.

Total order book was in excess of $4.5 billion. In terms of allocations, US-based investors received 55% while Asian investors were allocated 28% and the balance 17% across European investors. In terms of investor type, asset and fund managers subscribed for 63% of the deal, commercial and investment banks subscribed 9%, private banks 15% and insurance/pension funds subscribed for 4%. Strong interest from US-based investors underscores SBI’s sound credit profile and its position as India’s largest bank. The offering was subscribed 4.8 times and saw demand from over 350 investors.

The offering was made pursuant to Regulation S under the US Securities Act outside of the United States, and in the United States in a private placement solely to certain qualified institutional buyers in compliance with Rule 144A under the US Securities Act.

Having accessed the Regulation S market several times in the past, the offering, being SBI’s debut issuance with a Rule 144A component, allowing it to broaden its debt investor base and to access large, highly capitalised US institutional investors in the private placement market.

Bank of America, Citigroup, Deutsche Bank, HSBC Holdings, Royal Bank of Scotland Group and UBS acted as joint lead managers for the offering.