SBI raises Rs 4,000 crore via AT1 bonds

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September 01, 2021 5:30 PM

The issue garnered overwhelming response from investors with bids in excess of Rs 10,000 crore received against a base issue size of Rs 1,000 crore, the bank said in a release.

"Based on the response, the bank has decided to accept Rs 4,000 crore at a coupon of 7.72 per cent," the release said."Based on the response, the bank has decided to accept Rs 4,000 crore at a coupon of 7.72 per cent," the release said.

State Bank of India on Wednesday said it has raised Rs 4,000 crore through Basel compliant additional tier 1 (AT1) bonds, offering a coupon rate of 7.72 per cent.

The issue garnered overwhelming response from investors with bids in excess of Rs 10,000 crore received against a base issue size of Rs 1,000 crore, the bank said in a release.

“Based on the response, the bank has decided to accept Rs 4,000 crore at a coupon of 7.72 per cent,” the release said.

This is the lowest pricing ever offered on such debt, issued by any Indian bank since the implementation of Basel III capital rules in 2013, it said.

While the bank has AAA credit rating from local credit agencies, the AT1 offering is rated AA+, which is the highest rating in the country for these instruments in view of the hybrid and high-risk nature of these instruments, the release said.

It is the first AT1 bond issuance in the domestic market post the new Sebi regulations announced in March this year, it said.

The AT 1 instrument is perpetual in nature. It, however, can be called back by the issuer after five years or any anniversary date thereafter.

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